The Current Bear Market Is Different From The Others -Here’s Why

The Current Bear Market Is Different From The Others -Here's Why

bitcoinwhich has lost close to 73% since its high in November, has clearly entered a ‘bear market’.

The Current Bear Market Is Different From The Others -Here's Why

Current macroeconomic factors are bear marketThis makes it quite different from the bear market seen in 2018 and 2020 before, making the chances of recovery even more difficult. This market trend, triggered by macroeconomic factors, also caused a drop in the total value of crypto markets by more than $2 trillion.

According to current data shared by on-chain data firm Glassnode, it has also emerged that Bitcoin is experiencing a “capital outflow” that is significantly larger than past bear markets.

Representing 43% of the cryptocurrency market, Bitcoin is trading well below its ‘actual price’, revealing that many investors are actually making losses.

Bitcoin is trading around $21,400. There are still a few factors that can promote instant recovery.

Technical Indicators Not So Positive for Bitcoin

glassnodeHe pointed out that although the Bitcoin price is around the upper limit of previous bear market losses, other technical factors are putting more strain on it.

BTC has dropped well below its 200-day moving average and is doing better overall on only 2% of trading days in history. This also occurred at much lower valuations. According to Glassnode, spot prices are down 11.3% from the current price, indicating that average traders are now making losses.

Such a scenario had shown a bottom in the previous bear markets. But it doesn’t look like that right now. Capital outflows are also at their worst for BTC right now even worse than the 2020 COVID-19 crash.

“We can now assert with certainty that the 2021-22 Bitcoin bear market is one of the most important, if not the most important, in history. -Glassnode”

While Bitcoin has been traded in previous Federal Reserve cycles, this will be its first cycle as a popular investment vehicle. It will also be BTC’s first major encounter with widespread inflation and recession risks.

Bitcoin was originally taken as an effective inflation hedge. But in 2022 he largely failed in that role.

Bitcoin is expected to remain under pressure as the Fed decides to keep interest rates at least until the end of the year.

You can follow the current price action here.

Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.

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