Bitcoin's dip below $30,000 owing to a market sell-off has spurred fears that it would fall below $20,000 in the future. Is such a substantial decline, however, justified in light of today's macro fundamentals?
Many analysts, like Vijay Nayyar of Luno Exchange and Jehan Chu of Kinetic Capital, have predicted that the cryptocurrency will continue to decline below $25,000. Anthony Pompliano, on the other hand, has a positive outlook. The market is taking a risk against fears about the fast-spreading Delta form of COVID-19, according to Morgan Creek Digital Assets' creator. If the new coronavirus strain spreads on an Alpha scale, he predicted that the government as a whole would implement a "more aggressive monetary stimulus" event.
Pompliano envisions the way to additional dollar liquidity in seven phrases, according to his newsletter:
- The delta variant of COVID continues to increase case numbers at a rapid pace.
- Death numbers from the delt variant do not accelerate because of vaccinations.
- Politicians feel pressured & resort to their past actions as a sign of "doing something".
- Politicians implement mask mandates first and then eventually mandate a second wave of lockdowns / shelter-in-place orders.
- There is economic damage caused by this second wave of government actions.
- The Federal Reverse, elected officials, and the other economic organizations feel the need to intervene under the guise of helping the average citizen.
- We see an acceleration of the historic fiscal and monetary stimulus.
How Is The Next Market Condition?
On July 2, Pompliano's comments came as Bitcoin markets collapsed in lockstep with other risk assets around the world. Meanwhile, government bonds in the United States rose in tandem with the dollar, showing that investors are seeking safe havens amid the global market volatility. According to international news reports, the defeat was accompanied by mounting doubts about the economy's recovery. The Delta variation of COVID-19 has spread swiftly, prompting authorities in numerous nations to consider reimposing lockdowns and limiting economic activity.
Mohammed Kazmi, portfolio manager at Union Bancaire Privee, said that markets are now retreating from promises of a V-shaped rebound and are concerned about the economy's future. Some central bank officials are also enthusiastic about the prospect of relaxing their $120 billion-per-month asset purchase program. Fed Chair Jerome Powell, on the other hand, stated that the central bank will continue to use quantitative easing until the US economy has fully recovered.
Although the Bitcoin industry has suffered downward volatility over the current market cycle, the fundamentals have remained unchanged, according to James Wo, founder and CEO of global blockchain and digital asset investing business Digital Finance Group.
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