Bitcoin (BTC) could potentially experience a significant drop of 50% if the upcoming winter poses a major challenge for Europe. This prediction comes from Filbfilb, a veteran crypto market analyst and creator of trading suite DecenTrader. BTC/USD has failed to regain support at $20,000, further raising concerns about its future. Filbfilb believes that BTC could hit a bottom as low as $10,000 in 2022, depending on how the European energy crisis unfolds and whether diplomacy can prevent a major emergency in 2023.
Filbfilb’s track record adds credibility to his prediction. During the bear market of the last halving cycle in 2018, he accurately identified the market bottom when BTC/USD reached $3,100.
Cointelegraph reached out to Filbfilb for more details on how the upcoming winter could impact the already fragile Bitcoin trading environment. Filbfilb acknowledges that this time the situation is different due to the high correlation between Bitcoin and the “legacy” markets, particularly the NASDAQ, which is under pressure due to the Federal Reserve’s monetary policy. He explains that the volume base this time is around $11,000, with $20,000-$10,000 having limited historical data. The outcome will depend on how Europe navigates the winter and the diplomatic dialogue between NATO and Russia.
When asked about the differences between the current cycle and the previous bear market, Filbfilb highlights the paramount importance of the correlation with the “legacy” markets. He notes that Bitcoin has not existed in a stiff inflation push economy and is behaving more like a risk-on asset than an inflation hedge. However, he believes that the current correction is within the normal timeframe and percentage change for this stage.
Filbfilb expresses confidence in a Q1 rally, primarily based on two reasons. Firstly, Bitcoin typically exits a bear market after around 1,000 days, aligning with Q1. Secondly, if Europe successfully navigates the winter economically, it could lead to positive prospects for the following year. However, he acknowledges that the CPI data dropping around the same time could impact the outcome.
Regarding Ethereum’s switch to proof-of-stake, Filbfilb states that only time will tell if it will boost its value proposition in the long term. He believes that the reduced emission of coins could act as a catalyst for value.
Filbfilb expresses bullishness towards ETH/BTC and altcoins in general, especially with the Merge approaching in about two weeks. While history suggests a rally followed by a dump after such events, the overall direction is expected to be upward. However, he notes that the CPI data and its impact on BTC’s short-term performance should be considered.
When asked about the collapse of 3AC, Filbfilb admits surprise and attributes it to naivety and overlooking risk. He criticizes those involved for prioritizing growth over risk management, considering the volatility in the crypto space.
Filbfilb believes that the Fed will raise rates regardless of good or bad news, depending on the strength they want to demonstrate. The impact on the BTC price going into 2023 will largely depend on the winter in the EU, as it could affect the relationship between the EU and the US, leading to expensive imports and decreased demand.
It is important to note that the views and opinions expressed by Filbfilb are his own and do not necessarily reflect those of Cointelegraph.com. Investors and traders should conduct their own research before making any investment decisions.