The winter of 2022-2023 is causing more than headaches for EU politicians and citizens – crypto owners around the world could feel a tangible impact, according to Decentrader’s Filbfilb.
Bitcoin (BTC) could fall another 50% from current levels if the upcoming winter becomes a major test for Europe.
This is the conclusion of a veteran crypto market analyst this week as BTC/USD failed to claw back $20,000 support.
In an interview with Cointelegraph, Filbfilb, creator of the DecenTrader trading suite, predicted that the potential BTC price bottom would come in 2022 at $10,000.
He believes risky assets will be tested as Europe’s energy crisis deepens, and the extent to which cryptocurrencies will suffer largely depends on how diplomacy can win to avert a major emergency in 2023.
The numbers aren’t just pie in the sky; In the midst of the bear market of the last halving in 2018, Filbfilb perfectly timed the market bottom as BTC/USD hit a low of $3,100.
Cointelegraph asked for more details on how the upcoming cold season could impact the already fragile Bitcoin trading environment.
Cointelegraph (CT): They pretty much bottomed out last cycle at $3,100. Is further downside likely and what price do you think could be a justified basis this time?
Filbfilb (FF): The price of Bitcoin is currently highly correlated with “old” markets, particularly the NASDAQ, which we know is under tremendous pressure due to Federal Reserve monetary policy. This time “things are a little different” due to high correlation and external economic forces.
Last time it was pretty easy due to the volume attributed to the $3,100 bottom and 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.
Much depends on winter and the dynamics of how Europe deals with winter; I expect poor winter momentum to test previous volume highs in the $10k-$11k range. The dialogue between NATO and Russia seems necessary given what happens next; the sooner this happens, the higher the minimum for bitcoin.
CT: How is the current cycle different from the previous bear market? Does the macro play a much larger role in this loop?
FF: As mentioned above, the correlation with “Heritage” is in the foreground; Bitcoin did not exist in an economy with a hard inflationary streak, and it is behaving like a risky asset, not an inflation hedge. So this time it’s a little different. However, we are adjusting to the normal times and the normal percentage will change to the normal percentage for where we are. So for now “the same but different”.
CT: You said recently that “a rally seems clear in the first quarter”. What makes you so confident?
FF: Two reasons:
First, if you use the starting point of the Bitcoin cycle, which is the actual halving issue date, Bitcoin typically exits the bear market after around 1,000 days, which is the first quarter after which the new narrative begins.
Second, we will survive the winter; From a game theory perspective, it seems likely that if things go bad but Europe weathers the winter economically, things will look very positive for most of the next year, while it increases the likelihood of a dialogue if things go bad that i mentioned that it would bring stability in the short term. It can be positive thinking so I would give that scenario a 2/3 chance.
CT: What do you think about the transition from Ethereum to Proof-of-Stake? Does this increase the value proposition in the long run?
FF: Difficult question; Only time will tell, but lower coin supply should be a catalyst for value.
CT: Are you bullish on ETH/BTC (and altcoins) as the merger is about two weeks away? Or should it be a promotional event?
FF: I’m generally optimistic about ETH. This effectively resembles the bisection effect. History tells us that we will bounce back on these types of events and bounce back shortly after, but the general direction will be up.
I got sucked into this idea, but the big elephant in the room is the CPI data, which falls around the same time. Much will depend on this; The upbeat CPI data and selling news mean BTC could outperform short-term momentum, but the case for ETH will be pretty strong in the next cycle,