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Standard Chartered predicts that bitcoin could drop to $5,000 in 2023 as part of their research on potential market surprises in the coming year.
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Bitcoin price dropped sharply and abruptly to kick off the week as investors await a major Fed policy decision and internalize concerns about Binance.
bitcoin It was last down more than 3% at $29,121.60, as measured by Coin Metrics. Earlier, it sank to $28,995.02, its lowest level in more than a month.
The reason for the sharpness in the decline is not clear, although the move coincided with the Wall Street Journal a report Recent concern from investors increased about Binance. Specifically, CEO Changpeng “CZ” Zhao reportedly suggested in a private conversation in 2019 that Binance affiliates took a portion of the trading volume around the time it launched its US trading arm. There are questions about whether this activity constitutes “laundering trade” aimed at inflating turnover.
Bitcoin fell sharply on Monday morning.
Enance is the largest crypto exchange in the world. It was sued by the Securities and Exchange Commission last month and is at the center of a Justice Department investigation that will likely end in a consent decree or settlement, CNBC previously reported. Federal prosecutors have been examining anti-money laundering violations and sanctions evasion charges, allegations that will make it difficult for Binance or its founder, Zhao, to continue to obtain licenses to operate.
However, not everyone is convinced that such a big move can be made in the Binance story.
“You probably put it back to technicals or flows,” said Kaley Cox, an analyst at investment firm eToro. “$30k is a big deal, and it makes sense that bitcoin investors would get more nervous around these levels. Refunds aren’t always a straight line.”
Elsewhere, investors are also watching what the Federal Reserve does at the conclusion of its two-day meeting on Wednesday.
“Bitcoin has been fluctuating within a narrow range for a little over a week and is likely to continue to do so until the conclusion of this week’s FOMC meeting,” said Yuya Hasegawa, cryptocurrency market analyst at Japan’s Bitcoin exchange Bitbank. “The market has priced in almost the entirety of another 25 basis point rate hike by the Fed this week and is paying close attention to whether it implements another by the end of this year as the FOMC’s previous economic projections suggested.”
The price increase helped push down the Bitcoin price throughout 2022, which was already filled with many negative catalysts for the industry. Despite bitcoin’s recent resilience and stock rally, recession fears remain as traders weigh the delayed impact of interest rate hikes and recent signs of a slowdown in the economy.
“We still have to see personal consumption expenditures for June…and it is unlikely that they will rush to a decision to hold off on raising interest rates until they have more data and are more confident that inflation is coming down,” Hasegawa added. “This means that the FOMC rate decisions going forward will likely continue to be ‘live’, and bitcoin may not manage to break out of $31,500 for another while.”
— CNBC’s Rohan Goswami contributed to this report.
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