Bitcoin Seen Drops to $22K as Bear Market May Persist for a While

As stocks plunge and inflation rises, cryptocurrencies appear to be following suit.

In the last six months, Bitcoin, the largest cryptocurrency by market capitalization, has lost close to half of its value.

Bitcoin is currently selling for an average price of $29,700 and Glassnode has recorded an outflow of almost $1.3 billion, with a net download of almost $700 million.

Ether, the second largest cryptocurrency, has lost more than 55 percent of its value. This doesn’t even begin to address the TerraUSD scandal and its aftermath.

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Last week, crypto fund assets under management (AUM) hit their lowest level since July 2021.

This was a result of the current decline in cryptocurrency prices and stock markets, which has been fueled in part by the US Federal Reserve’s decision to start shrinking its balance sheet this month.

Bitcoin at a turning point

A senior market expert at Bloomberg Intelligence warned that Bitcoin is at a so-called “tipping point,” indicating that the cryptocurrency is poised on a curve where it can go up or down.

A part of the uncertainty that leads investors to avoid risky assets such as cryptocurrencies is undoubtedly attributable to the increase in interest rates.

With rising interest rates, tech stocks and cryptocurrencies have been hit hard.

According to Yash Patel, a general partner at Telstra Ventures that invests in crypto companies, the largest institutional players have expanded their trading activity in cryptocurrencies in recent years.

As interest rates rise, borrowing money for these transactions becomes less desirable.

Cryptocurrency is currently tied to the markets, which many think is not good for short-term investors.

BTC total market cap at $565.76 billion on the weekend chart | Source:

‘Very poor’ expectations for cryptocurrencies

Joseph Edwards, head of financial strategy at investment management firm Solrise Finance, stated that he has “very low” expectations for Bitcoin and cryptocurrencies in general.

“There is not a lot of fresh financing flowing into the markets, which is always a prerequisite for market expansion,” he said.

For her part, the Vice President of the Federal Reserve, Lael Brainard, points out that the market may finally consolidate and decline, which could result in a price pullback from $22,000 to $24,000 for Bitcoin.

bear market here for a while

Brianard noted that Bitcoin price may hover near the price support zone before falling, indicating that the downtrend may continue.

Meanwhile, blockchain and cryptocurrency industry insiders told CNBC that the latest slump in the digital currency market could help weed out “bad players” from the market.

“We are experiencing a bear market,” Bertrand Pérez, executive director of the Web3 Foundation, told CNBC at the World Economic Forum in Davos, Switzerland.

“I think that’s a good thing, because it will clean up people who were there for the wrong reasons,” he said.

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Featured image from Cointribune, chart from

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