Bitcoin May End The Year Around $28,000, According To Analysts At Deutsche Bank

Bitcoin may end the year around $28,000

Given how the cryptocurrency has been trading side by side with American stocks, analysts at Deutsche Bank have stated they anticipate the price of Bitcoin to reach around $28,000 by the end of the year.

While approaching $30,000 would still have the cryptocurrency trade at less than half of its high value set in November 2021, analysts Marion Laboure and Galina Pozdnyakov have predicted that BTC may witness a rebound of over 30% before the end of the year.

After a cryptocurrency market sell-off that was sparked in part by a risk-off mindset brought on by central banks raising interest rates to combat inflation and the war in Ukraine, the price of bitcoin has fallen more than 58 percent so far this year, and it is currently trading just above the $19,000 mark.

The crisis-hit cryptocurrency companies, who have been firing employees and blocking withdrawals from their platforms due to “extreme market conditions,” contributed to the sell-off. A bankruptcy filing has apparently been recommended for cryptocurrency lender Celsius Network, while competitor lender babel Finance and cryptocurrency exchange CoinFLEX have reportedly frozen withdrawals.

Major cryptocurrency hedge firm Three Arrows Capital has declared bankruptcy after allegedly failing to fulfill its obligations. For the first time since early 2021, the overall market value of the cryptocurrency industry fell below $1 trillion earlier this year.

Cryptocurrencies are becoming more closely associated with benchmarks like the S&P 500 and the tech-heavy Nasdaq 100, according to Deutsche Bank’s Laboure and Pozdnyakova. By the end of the year, the analysts forecast that it would return to January levels, dragging BTC along with it.

Based on a variety of indicators, including BTC’s 200-day simple moving average, analysts from on-chain analytics startup Glassnode have claimed that the current cryptocurrency bear market may be the worst one ever.

The indicator is “commonly used” to identify whether BTC is in a bull or bear market. Prices that remain above the cryptocurrency’s 200-day moving average indicate a bull market, while prices that fall below that moving average indicate a bear market. The price of BTC is now less than its 200-day moving average.

The Mayer Multiple (MM) by Glassnode, which analyzes the price of BTC in a historical perspective, also uses the indicator. Written by Glassnode: “For the first time in history, the 2021-22 cycle has recorded a lower MM value (0.487) than the previous cycle’s low (0.511). Only 84 out of 4160 trading days (2%) have recorded a closing MM value below 0.5.”

The cryptocurrency was also compared to diamonds, a heavily advertised asset, rather than gold, a reliable safe-haven asset, by Deutsche Bank’s experts. The strategists observed that BTC, which has even underperformed equities year-to-date, has fallen short of expectations that it would serve as an investment haven.

The value of gold, on the other hand, held rather well. Laboure and Pozdnyakova pointed out that there are other assets available that are comparable to the diamond market, which is partially driven by marketing.

“By marketing an idea rather than a product, they built a solid foundation for the $72 billion-a-year diamond industry, which they have dominated for the last eighty years. What’s true for diamonds, is true for many goods and services, including Bitcoins.”

The researchers also stated that, unlike public equity markets, there are no widely accepted valuation methodologies that can be used, making it challenging to stabilize the values of cryptoassets. Additionally, they claimed that the crypto market is “highly fragmented,” which implies that a freefall may continue “because to the complexity of the system.”

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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