Marcus Sotiriou, GlobalBlock's analyst, said that macroeconomic conditions play a crucial role when it comes to Bitcoin's current price movement.
The price of the world's first cryptocurrency is most influenced by the Fed and the stock market. As we can see, macroeconomics is in control.
This is still a new relationship for Bitcoin, which is more accustomed to its own economy and mass adoption controlling its price. However, the Fed's hawkish prospect and a sharp sell-off in stocks resulted in Bitcoin's 50% drop from its all-time high of $69,000.
Last month, this cryptocurrency fell to a low of $33,000. This was the worst start to the year for Bitcoin since the winter of 2018.
According to Sotiriou, trading in the crypto space will be difficult in the next few months. Some institutions will most likely try to protect themselves from the March rate hike.
It is still vague what percentage of the rate increase will be and whether it will actually happen. But as soon as it becomes clear that the Fed will not change the situation much, the upward trend in the cryptocurrency market may resume.
Therefore, the long-term forecast is still very optimistic. The increase in rates may affect economic growth, but the cryptocurrency market is not really related to it.
At the same time, usual drivers in the cryptomarket will help support prices later this year with the massive adoption of cryptocurrency technologies. Also, as the bitcoin market matures, this correlation between cryptocurrencies and stocks will weaken even further.
Other driving forces supporting Bitcoin will be positive headlines such as the Turkish government meeting with El Salvador.
But on the side, regulation remains a risk since the US is very strict about the regulation of cryptocurrencies.
SEC Chairman Gary Gensler is very interested in regulating much of the DeFi space, but this has not yet been implemented.
GlobalBlock's forecast for the end of the year is that Bitcoin will reach new all-time highs of $80,000-$90,000, while Ethereum will surpass Bitcoin and rise above $5,000 and approach $7,000.