Winter 2022-2023 causes not only a headache for politicians and citizens of the EU – cryptocurrency holders around the world can feel a tangible impact, according to Decentrader’s Filbfilb.
Bitcoin (BTC) could fall another 50% from current levels if the upcoming winter proves to be a major test for Europe.
This is the conclusion of a seasoned cryptocurrency market analyst this week as BTC/USD failed to regain $20,000 support.
In an interview with Cointelegraph, Filbfilb, the creator of the DecenTrader trading suite, predicted a possible BTC price bottom of just $10,000 in 2022.
As the energy crisis deepens in Europe, risky assets are being severely tested, he said, and the extent to which cryptocurrencies suffer depends largely on how diplomacy can win to avert a major emergency by 2023.
The numbers are not just pie in the sky; In the midst of the bear market of the latest halving cycle in 2018, Filbfilb accurately timed the market bottom when BTC/USD bottomed at $3,100.
Cointelegraph has requested more details on how the upcoming cold season could affect the already fragile bitcoin trading environment.
Cointelegraph (CT): You pretty much bottomed out at $3,100 in the last cycle. Is another price drop likely, and what price do you think is justified as a bottom this time?
Filbfilb (FF): The price of Bitcoin is currently highly correlated with “legacy” markets, especially the NASDAQ, which we know is under a lot of pressure due to the Federal Reserve’s monetary policy. This time is “a little different” due to high correlation and external economic forces.
It was fairly easy last time due to the volume attributed to the $3,100 bottom and the 85% retracement. This time, the base volume is around $11,000; $20,000 to $10,000 doesn’t have much of a time-based history.
A lot depends on winter and the dynamics of how Europe deals with winter; I expect poor winter dynamics to test previous highs in the $10,000 to $11,000 volume range. Dialogue between NATO and Russia seems necessary in view of what happens next; The sooner this happens, the higher the bottom for bitcoin.
CT: How is the current cycle different from the previous bear market? Does the macro play a much bigger role in this loop?
FF: As mentioned above, the correlation with “heritage” is in the foreground; Bitcoin did not exist in a hard inflationary economy and behaves more like a risky asset than an inflation hedge. So this time it’s a little different. However, we are adjusting within the normal time frame and percentage deviation from normal for our current situation. So, the first thing to say is “the same, the same, but different.”
CT: You said recently that “the rally in the first quarter seems obvious.” What makes you so confident?
FF: Two reasons:
First, if you use the starting point of the Bitcoin cycle, which is the actual release date when the supply was halved, Bitcoin usually exits the bear market after about 1,000 days, which is the first quarter after which a new narrative begins.
Secondly, we will have winter behind us; From a game theory perspective, it seems likely that if things go badly but Europe survives the winter economically, then things will look very positive for most of next year, and if things go badly, it will increase the likelihood of dialogue, which, as I mentioned , will bring stability in the short term. It can be positive thinking, so I would give this scenario a 2/3 chance.
CT: What do you think about Ethereum’s transition to Proof-of-Stake? Does it increase its value proposition in the long run?
FF: Tough question; Only time will tell, but the reduction in coin production should be a catalyst for value growth.
CT: Are you bullish on ETH/BTC (and altcoins) as the merger approaches in about two weeks? Or will it be a news event?
FF: I’m generally optimistic about ETH. This effectively resembles the bisection effect. History tells us that we are going to participate in such events and close shortly thereafter, but the general direction will be upwards.
I believe in this idea, but the big elephant in the room is the CPI data, which is dropping around the same time. Much will depend on this; Positive CPI data and sell news mean BTC could do well in the short term, but ETH has a lot to offer in the next cycle if all goes well.
