As of May 20, Bitcoin (BTC) is trading around $77K. Over the past week, the leading cryptocurrency has seen a 4.5% dip.
Experts surveyed by 'RBC Crypto' evaluated Bitcoin's chances for a pump in the near term, named target levels for the price, and shared what crypto traders should keep an eye on.
"It's important to stay above $75k"
Experts agree that all investor attention is focused on geopolitics and its impact on the global economy. The Middle Eastern conflict has pushed energy prices up, which directly affects inflation levels, says independent IT consultant Roman Nekrasov.
Data on the rise in consumer prices in the U.S. for April, released last week, showed that inflation in the U.S. has indeed begun to accelerate and reached 3.8%. This is higher than previously hoped.
Even with the appointment of the new head of the Fed, Kevin Warsh, who is a candidate of U.S. President Donald Trump advocating for faster interest rate cuts, investors understand that the American regulator, in such circumstances, will prefer not to lower the key rate to avoid further inflation spikes, says the analyst. He added that in this case, risk assets "won't see" a wave of capital inflow.
"Right now, it's crucial for Bitcoin to hold above the $75k mark — this is a psychological level, and dropping below it would open the path to lower setbacks. For a return to $80k, Bitcoin needs positive macroeconomic signals," believes Nekrasov.
The expert predicts that the crypto market will face a challenge in the coming week: macro factors will continue to exert pressure, and there are no positive signals. Therefore, a consolidation with a moderately bearish trend can be expected, said Nekrasov.
"Cautious sideways"
The most likely scenario for the week is a cautious sideways movement with increased volatility, noted lead analyst at Bitget Research, Ryan Lee. According to his estimates, Bitcoin's price may fluctuate between $74k and $80k in the coming days.
Following the release of consumer price growth data in the U.S. exceeding expectations, cryptocurrencies experienced a significant capital outflow as market participants now expect the Fed to maintain a tight monetary policy to keep inflation under control, confirmed Lee.
According to him, the yield on 30-year U.S. Treasury bonds rose to 5.18% on Tuesday — the highest since the global financial crisis of 2007. This indicates a growing level of fear regarding a potential inflation spike due to rising oil prices, triggered by the Middle Eastern conflict. According to a Bank of America survey, 62% of fund managers anticipate a rise in 30-year Treasury yields to 6% within the next year, which means sustained pressure on the entire segment of risk assets, noted the expert.
"One of the main indicators of current sentiment in the crypto market is the data on capital inflows and outflows in spot cryptocurrency ETFs. Over the last few trading sessions, crypto ETFs have collectively lost over $1.6 billion. This exerts a dampening effect on Bitcoin's price and the entire crypto asset market, which traditionally follows Bitcoin," explained Lee.
"Geopolitical Risk Indicator"
Currently, Bitcoin's dynamics are increasingly influenced not by internal crypto market factors, but by geopolitics, primarily the situation in the Middle East, says managing partner of VG GROUP, Vagiz Nurullov.
"Bitcoin has essentially become a counter-cyclical indicator of geopolitical risk: the asset moves in the opposite correlation with oil, Trump administration rhetoric, and market expectations regarding the opening of the Strait of Hormuz. This indicates the dominance of macro factors over fundamental drivers in the crypto market," said the expert.
He also noted the lack of pronounced institutional demand for cryptocurrencies. Purchases from Michael Saylor's Strategy and similar entities support the market, but their scale is insufficient to form a sustainable upward momentum, believes Nurullov.
According to him, an additional factor of pressure remains the limited market reaction to the progress of the Clarity Act cryptocurrency regulation bill in the U.S. The expert noted that this event did not bring the expected volume of positive sentiment and did not become a standalone growth driver.
Separately, the upcoming IPOs should be taken into account: large placements traditionally have the ability to temporarily redistribute liquidity from risk assets, increasing short-term volatility in financial markets, added Nurullov. In his opinion, it is premature to ignore this factor.
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