Crypto analyst Nicholas Merten believes that Bitcoin could face a significant decline if a recession occurs. Merten suggests that if key commodities like oil, natural gas, and uranium start to cool down, it may signal a short-term recession. In this scenario, Bitcoin could drop by over 46% from its current value, potentially reaching a low range of $15,000 to $17,000. Merten believes that Bitcoin will only see sustained growth when the Federal Reserve takes measures to stimulate the economy. As liquidity increases, Bitcoin could experience a bull market.
Merten points out that the current market does not resemble a bull market as it has been moving sideways since March 2023. Bitcoin has struggled to break through clear resistance levels between $28,000 to $32,000. Moreover, Merten highlights that Bitcoin’s success is closely tied to increases in the money supply and risk-on mentality, which are absent currently. Therefore, Merten urges a conservative approach and advises waiting for signs of optimism and liquidity in the market before expecting significant growth in the crypto industry.
At the time of writing, Bitcoin is trading at $27,912, reflecting a 1.8% increase in the last 24 hours. It remains to be seen how Bitcoin will perform amid economic uncertainties and the level of liquidity injected by the Federal Reserve.
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