The release of the FOMC meeting minutes late on Wednesday did not affect the leading cryptocurrency. The market has already priced in the document's hawkish tone.
Today, Bitcoin remained above the July lows (the support at $18,763) ahead of the release of US inflation data. BTC could test this level today, but even if Bitcoin breaks through it, it could be a false breakout.
The leading cryptocurrency has already lost 71% of its value since November 2021. However, some key experts believe that BTC could dive even further before it regains stable footing.
Florian Grummes, managing director at Midas Touch Consulting, believes that Bitcoin could likely slump below the $10,000 mark to about $6,000 before it consolidates and begins to recover.
Grummes is rather pessimistic about Bitcoin in the short term and sees BTC's downward correction end only at $6,000.
"It's my worst case right now [Bitcoin at $6,000]. I wouldn't rule it out. I think $10,000 is probably what's going to happen, and then we're going to see a nice bounce and maybe another test of the $10,000 to $15,000 range, like a double low at some point, and that would be then the final end of the crypto winter, but it still takes time I don't think it's happening anytime soon," Grummes said.He also noted that there are multiple factors that could affect Bitcoin's prices, such as the current volatility in the market and the ongoing bearish sentiment.
Grummes added that BTC might experience some slight increases on the way to $6,000. However, only a particularly special event could push BTC and the crypto market as a whole out of the crypto winter.
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Grummes noted that uncertainty and the liquidity crisis plaguing the crypto market could prevent the cryptocurrency from hitting its previous highs.
"If this whole crypto sector can recover like it should or did in the past, then once the halving has happened, the whole sector likely will be in the new bull market. Bitcoin has been going up since 2009 relentlessly. Fundamentally speaking, regulation, of course, could be basically preventing a real new bull market," he added.Glimmer of hope for BTCThe ongoing turmoil in the market has pushed down demand for the leading cryptocurrency. The Federal Reserve was forced to tighten its monetary policy to quell the highest inflation in recent years. The Fed's policy shift was one of the main causes of the ongoing crypto winter.
While some experts believe that Bitcoin could be a hedge against inflation, Grummes is betting on gold instead.
However, there is still a glimmer of hope for the leading cryptocurrency, he noted. According to Florian Grummes, previous bearish periods lasted from 24 to 27 months. The ongoing downturn could last another year before a true bull market begins, Grummes forecasted.
Despite his pessimistic scenario of BTC testing $6,000, Florian Grummes believes the market would eventually rally. "We probably will have to wait until the next Bitcoin halving, which is supposed to be happening in May 2024," Grummes said.
Mike Novogratz: Bitcoin's trajectory would depend on the FedEarlier outlooks by Ark Invest and its CEO Cathie Wood, which stated that the leading cryptocurrency would hit $1,000,000 in 2023 were met with skepticism, particularly when considering the losses sustained by Wood's investment fund.
However, Mike Novogratz, the CEO of Galaxy Digital, has a similar opinion on what could end the bear market and lead to a crypto rally.
In a recent interview, Novogratz told Yahoo Finance that Bitcoin and other crypto assets will likely rally the moment the Federal Reserve puts its monetary policy tightening on hold.
Galaxy Digital's CEO believes that the sell-off in the crypto market was triggered by the Fed's interest rate hikes.
"Since the Fed has decided to try to smash inflation by raising rates aggressively, the most aggressive rate-raising in our lifetime, Bitcoin sold off with other assets. It's actually done better than most. I think if you finally get the pause, you will start seeing Bitcoin pick back up. Bitcoin and all cryptocurrencies. Are we going to get the pause? At one point, yes," Novogratz said.He added that the prevailing bear market could last up to six more months.
"You know the bear case is we've got two to six months left of this pain. The bull case is the market starts breaking. And we're seeing a lot of breakage. Not necessarily in crypto but in the rest of the world," Novogratz said.According to Galaxy Digital's CEO, sellers in the crypto market are largely exhausted.
"Crypto's interesting in that three months ago, after the big selloff and the deleveraging, most people that needed to sell sold. And so you've seen price is much more muted. Things take off when there's a good story and they sell right back off when the story goes away. And so a lot less activity in crypto, a lot less for sellers. But also a lot less new buyers."The leading cryptocurrency and the market in general could continue to hover near its current levels with little fluctuations until an event like slower Fed interest rate hikes would boost volatility significantly.