19.05.202112:42 Forex Analysis & Reviews: Wall Street predicts Bitcoin to collapse to $29,000

On Tuesday, bitcoin lost 6% of its value in 2.5 hours. It plummeted to 3-month lows, reaching $42.9 thousand. Pressure on the quotes of the leading cryptocurrency was exerted by the latest news from Beijing.

China has decided to put a bold end to its already tense relationship with virtual currencies. Even 4 years ago, local crypto exchanges were closed there, and yesterday it became known that the services of financial companies related to cryptocurrency transactions were banned in the country.

The statement was signed by 3 financial regulators of the country. The new cryptocurrency ban is justified by the fact that the virtual money market is now excessively inflated, speculative trading is taking place on it, and the state in the meantime takes care of the interests of people.

"This is the latest chapter of China tightening the noose around crypto," commented the head of the London-based crypto-credit platform Nexo, Antoni Trenchev.

On Wednesday morning, the long-suffering bitcoin continues to melt before our eyes, maintaining the downward trend that it took last week after two statements by Elon Musk.

So, at the time of preparation of this material, the digital leader fell to the level of $39,209. During the day, it fell by more than 14%, and during the week its losses amounted to more than 30%.

Other leading cryptocurrencies also declined in the morning. For example, Ethereum plunged more than 17% in 24 hours, to $2,880.

Meanwhile, the analytical service Glassnode reports that last Monday, crypto exchanges registered a net inflow of bitcoins in the amount of 30,749.89.

This is the largest figure for 1 day since March 12, 2020, when the price of the digital coin fell by 40% amid panic sales caused by the coronavirus. This day was called "black Thursday" : then the exchanges reported a net inflow of BTC in the amount of more than 40 thousand.

Analysts note that the current increase in the flow of bitcoins to cryptocurrency exchanges is a sign that more and more retail traders want to liquidate their assets in a falling market, while institutional investors are not giving up yet.

Nevertheless, experts from Wall Street believe that the support of large investors will not save the situation. Bitcoin will not be able to stay on its feet in the near future and will continue to fall.

One of the reasons why the global cryptocurrency will be on the bear side is its strong dependence on the statements of Elon Musk. Recall that in recent days, the head of Tesla and SpaceX twice sent bitcoin to a knockdown.

Given the negative news background, analysts predict that in the short term, the quotes will move below $40 thousand. There are also more pessimistic scenarios.

For example, analyst Carter Worth of Cornerstone Macro believes that, being further on the downward wave, BTC may collapse to January lows. Its forecast for the leading cryptocurrency is $29k.

However, the expert is sure that bitcoin will not stay at the bottom for long. In his opinion, the coin has a good growth potential, so after a significant drop, a new stage of rapid take-off will come. Worth notes that, despite the current decline, BTC still has a chance to reach a record high of $100 thousand at the end of the year.