The expert stated that there is a high probability of a new drop in bitcoin

This week, investors are waiting for PCE inflation data and a revision of US GDP. Inflation above the forecast of 3.2% may increase pressure on bitcoin and bring it back to $71,300. Weaker data will support growth to $78,500-79,500, however, it is premature to talk about a trend reversal without consolidating above $82,850. Alexander Baryshnikov, the manager of the Mining fund at Record Capital Management Company, told Izvestia on May 25.

According to him, last week was a period of high volatility and investor nervousness for bitcoin. Despite the final decline of only 0.5% to $ 77 thousand, within a week the cryptocurrency experienced a sharp drop, large—scale liquidations and an attempt to recover amid pressure from the US Federal Reserve and uncertainty surrounding negotiations between the US and Iran.

"During the week, bitcoin dropped to $74,289, and on Friday and Saturday, the market faced sharp sales. The volume of liquidations of long positions exceeded $210 million per day, which was one of the largest blows to the bulls in recent times. By Sunday, buyers were able to regain about 4% of the local low, but this rebound has not yet changed the overall picture of the market," the expert said.

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The main factor of pressure on the cryptocurrency was the policy of the US Federal Reserve System. New Fed Chairman Kevin Warsh has made it clear that the regulator is not ready to ease monetary policy, and Governor Christopher Waller called discussions of a rate cut "madness." Against this background, the probability of a rate hike by December, according to market estimates, already exceeds 70%. In the context of tight monetary policy, bitcoin continues to be perceived by investors as a high—risk asset, and short-term bounces as an opportunity to reduce positions.

Baryshnikov said that the news surrounding the negotiations between the United States and Iran created additional market volatility. However, every report of possible progress quickly lost its impact after denials from Tehran. As a result, market participants have become significantly less responsive to geopolitical headlines.

According to the expert, the official armistice agreement between the United States and Iran and the opening of the Strait of Hormuz could be a strong positive factor for the crypto market. Otherwise, an escalation of the conflict or a breakdown in negotiations can return bitcoin to the lower limit of the ascending channel around $ 71,300. In the meantime, the market remains between two sources of uncertainty — the Fed's tough stance and the unstable geopolitical situation.

Baryshnikov reported on May 18 that the cryptocurrency market has entered a protracted correction phase: against the background of the Fed's harsh rhetoric, rising geopolitical tensions and the flow of capital into shares of AI companies, bitcoin may test the level of $ 70 thousand. until the end of May. At the same time, further dynamics will largely depend on the state of the American stock market and the continued interest of investors in the AI narrative.