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Bitcoin and other cryptocurrencies’ recent price actions bring up many questions about the depths of market fluctuations. Particularly, recent large institutional investments through ETFs in the USA and Bitcoin‘s approaching halving are critical to understanding what is happening in the market. Moreover, today an analyst provided some critical evaluations. According to Crypto Capo, BTC could fall to the $45,000 level.
Can Bitcoin Drop to $45,000?
Entries into Bitcoin ETFs reached $7.35 billion in 2024, and this development is emerging as one of the main driving forces behind Bitcoin’s recent price increases. Bloomberg’s latest reports indicate that the demand from institutional capital in this area played a significant role in BTC reaching record levels such as $66,800. However, there are still some concerns about the sustainability of this rise.
In particular, the prediction of Capo, known as the “crypto bear” in the market and famous for his consistent bearish forecasts for Bitcoin, is drawing attention. Capo claims that the high interest rates of the Federal Reserve will cause the Bitcoin price to drop to $45,000. Such downward predictions create an atmosphere of concern in the market and unsettle investors. Capo’s statements are as follows:
“Do interest rate cuts indicate a rise or a fall?
Throughout history, we have seen that when interest rates pause, markets enter a distribution phase or the final stage of a rally. When the Fed starts to lower interest rates, the market usually falls. But why?
Long periods of high interest rates are bad for the economy. Central banks intentionally maintain high interest rates during a phase known as QT (Quantitative Tightening) to slow down economic activity and control inflation. They reach their targets because inflation falls, but there are serious side effects like a potential recession. Some countries, like the UK and Japan, have already announced they are in a recession. It is likely that other countries will confirm this, and markets will return to their fair prices.”
Predictions May Not Always Be Accurate?
It’s important to remember that such market predictions do not always materialize and that Bitcoin is often a difficult asset to forecast. In particular, let’s note that the Spot Bitcoin ETF has created a different dynamic from previous halving cycles. The increasing demand from institutional investors is a situation not seen in previous cycles, and this development has caused the price trajectory to differ from past downward trends.
However, a market correction is certainly possible. Especially considering the price trends seen in Bitcoin’s past halving cycles, the likelihood of a certain decline is quite high. The $42,000 prediction from analysts at JPMorgan could also be an indication in this direction.
