Bitcoin Prices Could Rally 35% This Week, an Analyst Says. Cryptos Are Still Slipping.

“It has all the feeling of a bear-market rally, as we may be seeing in equity markets, but that doesn’t mean it won’t have further to run,” Craig Erlam, an analyst at broker Oanda, wrote in a note. “It showed a lot of resilience below $20,000 at times as conditions were far from ideal, which may provide some confidence that the worst is behind it but I’m not convinced it is.”

Bitcoin continues to trade at around one-third its November 2021 all-time high of nearly $69,000, with the market capitalization of the crypto space also tumbling, to $1.1 trillion from nearly $3 trillion, over the same nine months. 

Much of the declines have come in tandem with stocks, with Bitcoin following the S&P 500 and Nasdaq lower amid a selloff driven by multidecade high inflation and fears of a looming recession amid tightening monetary policy globally. While Bitcoin and its peers should theoretically trade independently of mainstream finance, they have shown to be largely correlated with other risk-sensitive assets, like tech stocks. 

But pressures from within crypto itself have also weighed on Bitcoin, including the meltdown of stablecoin Terra, the failure of a number of crypto lending platforms and the collapse of once-highflying hedge fund Three Arrows Capital. Yet amid discussions of a new “crypto winter,” digital assets have been pushing higher in recent weeks and Bitcoin prices recently cleared a key technical level.

“Bitcoin may be struggling to break above the $24,000 level, but its weekly candle finally closed above the 200-week moving average and it could improve the technical sentiment significantly,” said Yuya Hasegawa, an analyst at crypto exchange Bitbank.  “In case of break out, the price could retrace its June loss and could go as high as $32,000.” Hasegawa has a weekly target range for Bitcoin of $20,000 to $32,000.

A rally to $32,000 would represent a more-than 35% increase from current prices.

Beyond Bitcoin, Ether —the second-largest digital asset—lost 1% and was holding above $1,650. Smaller cryptos, or altcoins, were weaker, with Solana down 4% and Cardano 3% lower. Memecoins—initially intended as internet jokes—were mixed, with Dogecoin slipping 2% and Shiba Inu trading just above flat.

Write to Jack Denton at jack.dentondowjones.com