The Bitcoin (CRYPTO: BTC) price is down 3.5% over the past 24 hours.
The worldâs top crypto by market cap is currently trading for US$21,112 (AU$30,283).
This comes after the Bitcoin price topped 30-day highs just last Thursday when the token traded for US$24,196, according to data from CoinMarketCap.
With the latest drop factored in, Bitcoin is now down 56% in 2022, temporarily diminishing hopes of a new, sustained price rally.
What needs to happen for a sustained Bitcoin price rally?
Almost every crypto â save those stablecoins that didnât meltdown â have traded closely in line with share markets in 2022. Particularly higher risk assets.
This yearâs crypto fire sale has mirrored (and magnified) the 26% year-to-date losses posted by the tech-heavy NASDAQ.
While cryptosâ correlation to stock markets may eventually come uncoupled, itâs not one of the factors analysts are waiting for to see a sustained rally in the Bitcoin price.
Instead, one of the requirements is an easing of the US Federal Reserveâs current path of aggressive tightening.
As market analyst at eToro Josh Gilbert pointed out, that will only happen once inflation figures in the worldâs largest economy come down.
According to Gilbert:
Crypto asset prices have rallied off their June lows, following equities higher as investors become more comfortable with the economic growth outlook. But markets are not yet out of the woods and need to see a clear fall in US inflation for this bear market rally to become sustainable.
Chief market strategist at Miller Tabak + Co Matt Maley agrees that the US Fed holds one of the keys to a digital asset rally.
âCrypto is a liquidity asset right now, so as long as the Fed is tightening, itâs going to be hard for it to see a sustained rally,â Maley said (courtesy of Bloomberg).
Maley added a second factor that could lead to a sustained rally in the Bitcoin price, namely confidence.
âSecond, the asset class has lost a lot of confidence with investors, so itâs going to take time for it to regain that confidence,â he said.
The post 2 things need to happen for a sustained Bitcoin price rally: experts appeared first on The Motley Fool Australia.
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More reading
- Why Bitcoin, Ethereum, and Shiba Inu are falling today
- Can Ethereum reach $10,000?
- Will Ethereum and Bitcoin see the ‘flippening’ in 2022?
- Why Bitcoin, Ethereum, and Dogecoin are falling today
- Tesla sells 75% of Bitcoin holdings. Here’s why Elon Musk is unloading
Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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