It has been several months since cryptocurrencies have been in the news with spectacular variations in their quotations. Since their violent stall in June after the failure of the Terra blockchain and the TerraUSD algorithmic stablecoin, then the bankruptcy of the Celsius Network platform and above all the monetary shift by central banks towards a rapid and lasting rise in their key rates to counter the inflation, major cryptos behave more like speculative assets that follow the downtrend of financial markets. Over the last few weeks, we have even observed a loss of volatility which nevertheless characterizes these assets. The most watched, Bitcoin, has been sailing around 20,000 dollars for more than a month.
Institutionals dominate trade
While individuals seem to be less present in cryptocurrency negotiations, exchanges are dominated by institutions who are playing on the decline in risky assets and therefore cryptos. This is also largely what makes Vincent Boy, market analyst at the brokerage firm IG France, say that cryptocurrencies should maintain a downward trend in the coming months and that the low point of this fourth bull cycle of the Bitcoin is probably not reached.
“ Expect further dips that could lead to further liquidity issues in the sector and test a new Bitcoin multi-year low “Warns Vincent Boy, evoking supports between 12,000 and 14,000 dollars for Bitcoin. At such levels, the analyst considers that they would be interesting entry points for long-term investing by focusing on the most interesting projects likely to be used in the future by central banks or private companies.
The use of blockchain is accelerating
Indeed, IG reminds that even if cryptocurrencies are still used and considered mainly as a speculative asset by investors, the Web3 sector is in full swing and continues to develop in the traditional economy at full speed. Central bank digital currency projects (MNBC), in particular, are developing rapidly, but despite the use of the blockchain, these have nothing to do with the decentralization advocated by Bitcoin. ” Bitcoin, for its part, tends to take back monetary sovereignty from states and institutions, such as central banks, to redistribute it to the population. “recalls Vincent Boy.
” Admittedly, Bitcoin is criticized mainly for its energy consumption, often wrongly or in a biased way, but the fear of States is probably to see their control over the currency diminish. For this reason, it is possible that many blockchains / cryptocurrencies will benefit from the development of the sector in the real economy, sometimes reducing decentralization, while Bitcoin could continue to undergo various and varied attacks before finding its place. “, he adds.
Chainlink and SWIFT
Among the traditional companies that are investing in blockchain, the IG analyst cites the case of international payments messaging SWIFT, which is conducting blockchain compatibility tests on its network. SWIFT is also testing the interoperability of cryptocurrencies and especially MNBCs. Such an implementation could thus benefit an already existing blockchain, which would help the success of this project. This is precisely the case of Chainlink which participates in the SWIFT project.
However, whether it is Ether which does not benefit from its update “The merge” allowing a fall in the energy consumption of the network, or the price of Chainlink which is not positively impacted by the evolution of its project with SWIFT, all cryptocurrencies are currently moving under pressure as are traditional financial markets. A trend to watch…