Stifel says Three Macro Factors Could Drop Bitcoin Price To $10,000

Stifel’s Chief Equity Strategist and Managing Director Barry Bannister believe that by 2023  bitcoin could lead to a plunge in price to $10,000.

When discussing bitcoin’s price with Business Insider, Bannister said that a tightening of Federal Reserve policy and reducing the balance sheet would negatively impact bitcoin’s value.

Related Reading | Bitcoin Sets Stage For Reversal As Unmoved Supply Nears All-Time High

The price is closely tied with the global money supply regarding bitcoin. Therefore, the strategist identified this first essential macro factor and cited that since the S&P 500 moved into the US dollar as its power base, any given Supply/Demand situation will affect BTC value.

If the money supply measure known as M2 slows down, it is likely that US financial status will tighten. Stifel Managing Director, Bannister believes this would cause a crash in bitcoin prices and other speculative assets like stocks or bonds. These are also denominated through loans given by banks with an interest rate attached.

Bannister pointed the Fed’s tightening could stop bitcoin’s growth as a second macro factor. In addition, the 10-year US Treasury yield has been increasing, and this will likely result in a surge. Overflow halts or slows down bitcoin transactions.

Bannister said;

In 2022, we see bitcoin in a broad trading range bounded by year-to-date intra-day levels with greater downside risk in 2023 <…> If the rising 10Y TIPS yield pulls gold lower, that also pressures Bitcoin. If Bitcoin divided by gold falls to the low end of its range (Fed tightens). Bitcoin could drop to $10,000 by 2023.

Lastly, the analyst from Stifel said that the Fed’s decision to tighten would create a lower equity risk premium. The action is good for bitcoin’s growth.

Analysts Vs. Stifel Predictions

With the Federal Reserve announcing it will ease its tightening, bitcoin could be set for a correction.

Bitcoin price is below its $38,000 support | Source: BTC/USD Chart on Tradingview.com

There is a deep dive in the cryptocurrency market, and bitcoin’s value has dropped by almost 9.4% in a week. If Bannister’s projection becomes true, this will be a more than a 75% drop from its current state.

Related Reading | Bitcoin Plunges Below $40 As Russia Has Reportedly Given Its Forces Order To Attack Ukraine

Several analysts report that bitcoin will likely crash further but rebound to a new all-time high. As written by InTheMoneyStocks’ chief market strategist, Gareth Soloway, bitcoin’s price is expected to move back up above $17,000 in the coming weeks or months.

However, Soloway believes that bitcoin will not last in the position for much longer. He said this based on how de-leveraging has affected digital assets as a whole and not just cryptocurrency specifically.

Yet, it won’t be the first time we will see a low of $10,000. For instance, in December 2017, BTC reached its high at around $20,000 and then went into winter. This resulted in an 80% plunge before finally recovering some ground.

Investors will likely opt for cryptocurrencies when interest rates rise, boosting digital assets. According to our report by Pantera Capital CEO Dan Morehead, increased stability in USD may lead people towards bitcoin over other coins because it’s more hedged against inflation risk while still being transnational.

Featured image from Pixabay, chart from TradingView.com

Stifel’s Chief Equity Strategist and Managing Director Barry Bannister believe that by 2023  bitcoin could lead to a plunge in price to $10,000.

When discussing bitcoin’s price with Business Insider, Bannister said that a tightening of Federal Reserve policy and reducing the balance sheet would negatively impact bitcoin’s value.

Related Reading | Bitcoin Sets Stage For Reversal As Unmoved Supply Nears All-Time High

The price is closely tied with the global money supply regarding bitcoin. Therefore, the strategist identified this first essential macro factor and cited that since the S&P 500 moved into the US dollar as its power base, any given Supply/Demand situation will affect BTC value.

If the money supply measure known as M2 slows down, it is likely that US financial status will tighten. Stifel Managing Director, Bannister believes this would cause a crash in bitcoin prices and other speculative assets like stocks or bonds. These are also denominated through loans given by banks with an interest rate attached.

Bannister pointed the Fed’s tightening could stop bitcoin’s growth as a second macro factor. In addition, the 10-year US Treasury yield has been increasing, and this will likely result in a surge. Overflow halts or slows down bitcoin transactions.

Bannister said;

In 2022, we see bitcoin in a broad trading range bounded by year-to-date intra-day levels with greater downside risk in 2023 <…> If the rising 10Y TIPS yield pulls gold lower, that also pressures Bitcoin. If Bitcoin divided by gold falls to the low end of its range (Fed tightens). Bitcoin could drop to $10,000 by 2023.

Lastly, the analyst from Stifel said that the Fed’s decision to tighten would create a lower equity risk premium. The action is good for bitcoin’s growth.

With the Federal Reserve announcing it will ease its tightening, bitcoin could be set for a correction.

Bitcoin price is below its $38,000 support | Source: BTC/USD Chart on Tradingview.com

There is a deep dive in the cryptocurrency market, and bitcoin’s value has dropped by almost 9.4% in a week. If Bannister’s projection becomes true, this will be a more than a 75% drop from its current state.

Related Reading | Bitcoin Plunges Below $40 As Russia Has Reportedly Given Its Forces Order To Attack Ukraine

Several analysts report that bitcoin will likely crash further but rebound to a new all-time high. As written by InTheMoneyStocks’ chief market strategist, Gareth Soloway, bitcoin’s price is expected to move back up above $17,000 in the coming weeks or months.

However, Soloway believes that bitcoin will not last in the position for much longer. He said this based on how de-leveraging has affected digital assets as a whole and not just cryptocurrency specifically.

Yet, it won’t be the first time we will see a low of $10,000. For instance, in December 2017, BTC reached its high at around $20,000 and then went into winter. This resulted in an 80% plunge before finally recovering some ground.

Investors will likely opt for cryptocurrencies when interest rates rise, boosting digital assets. According to our report by Pantera Capital CEO Dan Morehead, increased stability in USD may lead people towards bitcoin over other coins because it’s more hedged against inflation risk while still being transnational.

Featured image from Pixabay, chart from TradingView.com

Tags: bitcoinbitcoin priceblockchaincryptocurrencyStifel

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