Bitcoin Seen Dropping To $22K As Bear Market May Linger For A While
June 05 2022 - 07:02AM
NEWSBTC
As stocks plummet and inflation surges, cryptocurrencies appear to
be following suit. In the past six months, Bitcoin, the largest
cryptocurrency by market capitalization, has lost about half of its
value. Currently, Bitcoin is selling at an average price of
$29,700, and Glassnode has recorded an outflow of almost $1.3
billion, with a net discharge of nearly $700 million. Ether, the
second-largest cryptocurrency, has lost more than 55 percent of its
value. This does not even begin to address the TerraUSD scandal and
its repercussions. Suggested Reading | Cardano TVL Sheds $205
Million Since Hitting All-Time High In the past week, crypto fund
assets under management (AUM) reached their lowest level since July
2021. This was a result of the current price drop in
cryptocurrencies and equity markets, which has been partially
driven by the U.S. Federal Reserve’s decision to begin reducing its
balance sheet this month. Bitcoin At An Inflection Point A senior
market expert at Bloomberg Intelligence has cautioned that Bitcoin
is at a so-called “inflection point,” which indicates that the
cryptocurrency is positioned on a curve where it may rise or fall.
A portion of the uncertainty leading investors to shun risky assets
like cryptocurrencies is undoubtedly attributable to rising
interest rates. With rising interest rates, tech stocks and
cryptocurrencies have been severely impacted. According to Yash
Patel, a general partner at Telstra Ventures that invests in crypto
businesses, larger institutional players have expanded their
trading activity in cryptocurrencies over the past several years.
As interest rates rise, borrowing money to undertake these
transactions becomes less desirable. Currently, cryptocurrency is
tied to the markets, which many think is not good for investors in
the near term. BTC total market cap at $565.76 billion on the
weekend chart | Source: TradingView.com ‘Very Poor’ Expectations
For Crypto Joseph Edwards, the head of financial strategy at the
investment management company Solrise Finance, stated that he has
“very poor” expectations for Bitcoin and cryptocurrencies in
general. “There’s not much fresh funding flowing into the markets,
which is always a prerequisite for market expansion,” he said. For
her part, the vice chair of the Federal Reserve, Lael Brainard,
notes that the market may finally consolidate and decline, which
might result in a price retreat of $22,000 to $24,000 for
Bitcoin. Bear Market Here For A While Brianard noted that the
Bitcoin price may loiter near the price support zone before
dropping, indicating that the downward trend may continue.
Meanwhile, blockchain and cryptocurrency industry insiders told
CNBC that the latest drop in the digital coin market could help
eliminate “bad actors” from the market. “We are experiencing a bear
market,” Bertrand Perez, CEO of the Web3 Foundation, told CNBC
at the World Economic Forum in Davos, Switzerland. “I think that’s
a good thing, because it will clear the people who were there for
the wrong reasons,” he said. Suggested Reading | Bored Ape Yacht
Club Plunges By 60% Last Month Featured image from Cointribune,
chart from TradingView.com
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