Bitcoin Seen Dropping To $22K As Bear Market May Linger For A While

Christian Encila

1 year ago

2 mins read

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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.

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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.

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Featured image from Cointribune, chart from TradingView.com

Christian Encila

They say journalists never truly clock out. But for Christian, that's not just a metaphor, it's a lifestyle. By day, he navigates the ever-shifting tides of the cryptocurrency market, wielding words like a seasoned editor and crafting articles that decipher the jargon for the masses. When the PC goes on hibernate mode, however, his pursuits take a more mechanical (and sometimes philosophical) turn.

Christian's journey with the written word began long before the age of Bitcoin. In the hallowed halls of academia, he honed his craft as a feature writer for his college paper. This early love for storytelling paved the way for a successful stint as an editor at a data engineering firm, where his first-month essay win funded a months-long supply of doggie and kitty treats – a testament to his dedication to his furry companions (more on that later).

Christian then roamed the world of journalism, working at newspapers in Canada and even South Korea. He finally settled down at a local news giant in his hometown in the Philippines for a decade, becoming a total news junkie. But then, something new caught his eye: cryptocurrency. It was like a treasure hunt mixed with storytelling - right up his alley!

So, he landed a killer gig at NewsBTC, where he's one of the go-to guys for all things crypto. He breaks down this confusing stuff into bite-sized pieces, making it easy for anyone to understand (he salutes his management team for teaching him this skill).

Think Christian's all work and no play? Not a chance! When he's not at his computer, you'll find him indulging his passion for motorbikes. A true gearhead, Christian loves tinkering with his bike and savoring the joy of the open road on his 320-cc Yamaha R3. Once a speed demon who hit 120mph (a feat he vowed never to repeat), he now prefers leisurely rides along the coast, enjoying the wind in his thinning hair.

Speaking of chill, Christian's got a crew of furry friends waiting for him at home. Two cats and a dog. He swears cats are way smarter than dogs (sorry, Grizzly), but he adores them all anyway. Apparently, watching his pets just chillin’ helps him analyze and write meticulously formatted articles even better.

Here's the thing about this guy: He works a lot, but he keeps himself fueled by enough coffee to make it through the day - and some seriously delicious (Filipino) food. He says a delectable meal is the secret ingredient to a killer article. And after a long day of crypto crusading, he unwinds with some rum (mixed with milk) while watching slapstick movies.

Looking ahead, Christian sees a bright future with NewsBTC. He says he sees himself privileged to be part of an awesome organization, sharing his expertise and passion with a community he values, and fellow editors - and bosses - he deeply respects.

So, the next time you tread into the world of cryptocurrency, remember the man behind the words – the crypto crusader, the grease monkey, and the feline philosopher, all rolled into one.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.