Crypto analyst Nicholas Merten has warned that the cryptocurrency market could be on the brink of an epic setback. According to Nicholas, betting on the Federal Reserve to jumpstart the crypto markets by printing more money is not a wise decision.
Despite the quantitative easing that is currently underway, he believes that it is not enough to stimulate another bull market. He says that the Fed continuing to raise interest rates over the past month is a sign that they will continue to do the bare minimum.
Crucial Test Ahead
The expert pointed out that the crypto market is facing a crucial test, and if it fails, the total market cap of the industry could suffer an epic setback. He says that the market is entering a potential resistance band that hasn’t been surpassed since January, and that it will need to pass this test to avoid an 85% correction from the all-time highs.
Is Massive Crash Incoming?
Nicholas added that if the market does face the said epic setback, the total market cap could land in a range of around $390 billion. This would be an ideal range of support, according to him, as it would flush out a lot of the noise in the altcoin space, allowing investors to look for new market leaders and trends. He urges traders to be patient and focus on the long-term game.
The cryptocurrency market has been trading within an unusually tight 5% range since March 17, and the total market capitalization has gained 3.8% in the past seven days, driven mainly by Bitcoin‘s 3.5% price increase and Ether‘s 6.2% gain.
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Tracing Crypto’s Recent Performance
The cryptocurrency market has been performing well recently, with Bitcoin up approximately 70% this year and currently valued at over $28,000. The ongoing banking crisis has contributed to this surge as investors seek alternatives to protect themselves against inflation. However, Nicholas warns that the current surge in the cryptocurrency market could be short-lived and that traders need to be cautious.
Ethereum has remained strong above the $1,800 resistance zone, trying to break through the $1,940 resistance zone. Ether’s price reached as high as $1,880 before experiencing a downward correction, falling below the $1,800 level. If Ethereum fails to surpass the $1,900 resistance, it may initiate a downward correction.
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