In just six weeks, $830 billion has been wiped out from the global crypto industry in market capitalization. All of this raises one question: where does the buck stop, and how much more pain will investors bear?
Finally, after a streak of reds, there came a day when the bulls ended the day with green. The popular crypto rose up to 7 percent to touch the $31,000 mark on the latest trading day. Not very big, but this little hike has given the investors a little space to breathe after a very turbulent week, where BTC had reached the $24,000 mark.
Compared with last November, Bitcoin has not recovered to its lost glory yet, and as the reports suggest, it’s not likely to recover to that price anytime soon, but that’s not one thing you should NOT worry about according to the research.
As per Austin, Bitcoin will see more turbulence in the coming weeks. He explained that policies of the Fed have been such in recent times that including crypto, all the investment markets, the stock market, and the housing markets are crashing.
The highest hike in interest rates since 2000, that is 0.5 percent, is an effort from the Fed to suppress the market as stated by Austin. The market is also facing about 40-year-all-time-high inflation which is around 8.3 percent. However, he also claims that it is not something that crypto investors should be worried about.
So, here the question arises, will BTC is yet to hit the bottom? And is it a good time to invest let’s find out!
According to Austin and various research, BTC is yet to hit its bottom. The sell-off in the market has already begun, and the dipping prices could just be an opportunity for investors to invest less money, and gain long-term higher returns. The price of Bitcoin at this time is very close to its realized price which is $24,000.
The realized price is “the value of all the coins at the price that were bought divided by the amount of BTC that is in circulation”.
Hence, Bitcoin seems to be taking a dip but it’s not going to be falling behind from its realized value. To buy a BTC right now, you are actually paying the money which is actually its real value.
Is it a scope for a Long-Term Investment or a Trap for the Bulls?
As per the analyst, from here, Bitcoin could be a great investment prospect in the long run. If investors are able to buy the BTC at this price, with the demand growth in the future, the price is very likely to go up. The recent 7 percent hike in price could also stop the sellers from selling their coins, and according to the demand-supply rule, prices could shoot up at any time.
What are the Possible Causes for this Bearish Market Sentiment?
If you go deep down in the pool you will see three key reasons for the Bitcoin price drop and bearish sentiment among crypto investors. The utmost reason is the de-pegging and crash of stablecoins like Terra USD(UST), USD Tether (USDT), DAI, and Binance USD (BUSD) have aggravated a negative sentiment among crypto investors globally.
Next comes the most obvious reason, fears of rising inflation and the monetary policy tightening of the Federal Reserve, investors are pulling capital out of cryptocurrencies. A further factor is Bitcoin’s high correlation with stocks and S&P 500 which have also experienced a price drop in recent times.
Keep Your Ears on the Street
Last but not least, even though the market sentiments can change at a point in time and no one can predict exactly when it will hit the bottom it will be wise to keep an ear open to what the retail crowd is doing. Experts suggest that while forecasting market trends, the crowd is not always so wise. The retail crowd tends to lose money because its market assumptions are not supported by the crypto market environment.