Bitcoin price forecast after an aggressive anti-crypto speech delivered by the ECB

The crypto community must have been astonished by ECB’s Executive Board Member Fabio Panetta’s speech at Columbia University in New York. Called “For a few cryptos more: the Wild West of crypto finance,” the speech turns out to be one of the most aggressive any-crypto points of view expressed by a central banker to date.

Panetta did not hold into his criticism of cryptocurrencies. Their prices are volatile and fluctuate wildly, intermediaries charge huge fees, and even anonymous transactions are not that anonymous, as they leave a trail that can, eventually, be traced.

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The problem with cryptocurrencies, according to Panetta, is that the crypto market has reached a size larger than the sub-prime mortgage market that triggered the Great Financial Crisis in 2008. Only in 2021, 16% of Americans and about 10% of Europeans invested in crypto-assets. So what is the issue here? A bubble similar to the one in 2008 might be in place, one that may threaten the entire financial system as we know it.

Indeed, the volatility is remarkable in the cryptocurrency market. For instance, Bitcoin, the most important cryptocurrency, dropped from 68,000 at the end of 2021 to below 36,000 in early 2022.

Such volatility is detrimental to investors. On top of that, about 23% of all crypto transactions are associated with criminal activities.

Bearish flag, head and shoulders, or both?

Truth be said, Bitcoin had a hard time in 2022. It consolidated in what appears to be either a bearish flag or the right shoulder of a head and shoulders formation.

Of course, non of the two may prove correct. But as long as the price remains below $48,000, bulls have a problem as each move lower may trigger a run towards the measured move.

Speaking of the measured move, it is about the same for both the bearish flag and the head and shoulders. It points to much lower levels, and Bitcoin’s inability to bounce from the current levels should worry investors.