The BTC price remaining below $40,000 as of Thursday shows the formation of a new resistance level of $40,000 that creates higher risks of further price decline in the coming days.
According to Barron’s analysts, the war in Ukraine is the major factor for current market movements. The observed crypto prices and capitalization volatility in recent weeks indicate the increased risks in the global crypto market.
The most risk-sensitive investors appear to have abstained from purchases until a clear trend is formed. Moreover, they tend to prefer increasing their holdings in gold that maintains the high rates of capitalization growth in the recent months.
Ethereum faces even higher risks as the demand for smart contracts diminishes proportionally to investors’ concerns. Bitcoin’s status as the major cryptocurrency and the primary store of value allows it to remain more stable than most other digital assets but technical indicators do not confirm the negative trend’s reversal.
Despite the negative forecast for most crypto assets by Barron’s experts, they admit the improved positions of privacy coins as the reflection of the changed investors’ preferences in the market. Russian crypto investors may reorient to anonymous cryptocurrencies in an attempt to escape the inflationary pressure and regulatory restrictions.
For this reason, the demand for Monero, Zcash, and DASH may rise shortly. Monero’s stealth addresses contribute to higher anonymity and privacy for users. Such transactions can be completed with minimum transaction fees, enabling investors to reallocate their crypto funds almost immediately.
Zcash’s algorithms enable concealing the number of transactions, making it appealing to investors from jurisdictions affected by sanctions. DASH allows selecting the preferred degree of anonymity to conform to the national regulations. Some transactions may remain private, while others can be publicly available.
Barron’s analysts assume that the demand for anonymous cryptocurrencies will be above the average level in the market as long as the confrontation between the West and Russia persists. To escape the most negative scenario, many investors will have to rely on private transactions. When the situation is resolved and new regulations are introduced, the price dynamics of Monero, Zcash, DASH, and other crypto-assets may become close to the average crypto level. Meanwhile, the demand for various forms of anonymity will determine the relative positions of such cryptocurrencies. Investors’ risk assessment will also affect the ability of the crypto market to reverse bearish fears among long-term holders.
