Bitcoin dips below $30,000 as investors refocus on economic concerns

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Standard Chartered predicts bitcoin could fall to $5,000 in 2023 as part of its research into potential market surprises next year.

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Cryptocurrencies fell on Monday as investors put the excitement over Ethereum’s “Shapella” upgrade behind them and refocused on upcoming banking profits and recession concerns.

Bitcoin fell 3% to $29,515.35, according to Coin Metrics, falling below the key $30,000 it hit last week for the first time since June. Meanwhile, Ether was down 2.8% but maintained the $2,000 it broke last week.

The crypto is coming off a winning week in which prices were boosted by optimism around Ethereum’s latest tech upgrade, dubbed “Shapella” (also known as “Shanghai”). The update aims to bring greater liquidity to the network by allowing the removal of “locked” ether and ultimately attract more long-term institutional interest. Bitcoin and Ether were up 8% and 12% respectively for the week.

This week, it wouldn’t be surprising to see a small price correction, according to Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange Bitbank, and there could be some selling pressure as some investors might want take profits from the previous week.

As the crypto rallied, “Friday’s U.S. stock market showed choppy moves as consumer sentiment was stronger than expected and Waller’s speech from the Fed bolstered the possibility of another rate hike in May,” Hasegawa said. “Nevertheless, the Fed Funds futures market has already priced in more than an 80% chance of a 25 basis point rise in May, so the pressures from macro factors on the bitcoin price should be limited.”

Crypto investors are watching bank earnings this week for more on the health of the sector and the possibility of a coming recession. Several Fed officials are also scheduled to speak this week.

“We haven’t seen crypto perform in a slow, high-rate growth environment so far,” said Callie Cox, analyst at investment firm eToro. “Anyone can guess how crypto acts during a recession.”

For this week, any downside potential “shouldn’t be serious” or prevent bitcoin from continuing its uptrend, Hasegawa said.

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