- Global central banks have tightened their monetary policies partly due to speculative activities in the cryptocurrency market in an effort to combat high inflation.
- The challenges Bitcoin faced in reaching the $40,000 level have been notable, despite the annual decline in supply on centralized exchanges.
- At the same time, an analyst predicts that during Bitcoin’s short-term price correction, smaller and lower market cap altcoins could see significant gains.
Bitcoin price could experience a decline to around $32,000 after a consolidation period: Bitcoin price chart analysis!
Bitcoin Price Could Drop to $32,000
Global central banks have tightened their monetary policies partly due to speculative activities in the cryptocurrency market in an effort to combat high inflation. Despite regulatory interventions, investors continue to heavily invest in Bitcoin (BTC) and altcoins, which have outperformed traditional stock indices and risk-free treasury bonds in recent years.
The challenges Bitcoin faced in reaching the $40,000 level have been notable, despite the annual decline in supply on centralized exchanges. Industry analysts have observed that major fund managers like BlackRock are now indirectly purchasing Bitcoin through investments in mining companies. Additionally, the Bitcoin hash rate has significantly increased, quadrupling since the 2021 cryptocurrency bull run.
A well-known crypto analyst predicts that Bitcoin’s price will consolidate between $33,000 and $38,000 and then rapidly drop to $32,000, suggesting that this level will likely attract new buyers and signal the beginning of a bullish period. Simultaneously, the analyst anticipates that smaller and lower market cap altcoins could experience significant gains during Bitcoin’s short-term price correction.
Broader Market Trends and Regulatory Landscape
Efforts to ensure compliance with securities laws for traditional cryptocurrency companies in the United States are ongoing. Industry experts believe that the U.S. Securities and Exchange Commission (SEC) will likely approve the first spot Bitcoin ETF by January 10, 2024. Meanwhile, the Bitcoin market has seen a significant increase in open interest in options and futures, indicating growing demand from institutional investors.
