- Advertisement -
The year 2022 has proved unfavorable for the crypto market. The industry has faced a prolonged bear trend, with the flagship currency, Bitcoin, nearly 70% lower than its November 2021 ATH. Still, the market fear has not ruined investor interest in Bitcoin. Data shows that more than half of investors continue to hold their BTC holdings even in the crypto winter.
According to the statistics viewed by the blockchain analytics company TipRank, 62% of BTC addresses haven’t sold their collection of BTC in a year or more. In addition, as of September 1, site data indicates that 32% of investors have sold their BTC holdings in the past 12 months.
Related reading: Bitcoin Derivatives Reserve Rising, More Volatility Coming Soon?
The market’s downward trends created selling pressure among investors, which continued even then. A recent report of blockchain research from glassnode noted that BTC deposits on exchanges have moved in terms of seven-day average movement diminished to its 2-year low at 1,921 BTCs.
Notably, this crypto winter has surpassed the 2017 and 2019 carnage in falling crypto prices. While the previous downtrend occurred as a result of a bubble burst, the current bearish trend is caused by macro factors.
The TerraLuna collapse and the 22% sell-off of the Nasdaq generally disrupted market sentiment. At the time, the US Federal Reserve appeared to be controlling inflation with its aggressive approach and has been raising rates ever since. And as the Fed raises rates, the market is experiencing further sell-offs, pushing prices further back.
Bitcoin Price Analysis
In the current market environment, Bitcoin is struggling to keep its position above $20,000. The Fed’s comments still remain a major concern to prevent BTC prices from jumping. At the time of writing, the price of BTC stands at $20,065, down 0.70% in the past 24 hours.
Nevertheless, Bitcoin is currently navigating the inflation environment in the context of the Feds’ unfavorable comments. In June, the spike in Fed interest rates plunged BTC price below $20,000, but it soon showed signs of recovery and BTC claimed the $25,000 level.
Alternatively, BTC price will remain low in response to the latest Fed activity.
Analysts Remain Bullish on BTC
At the same time, some industry experts see the current market environment as an opportunity to buy cryptos.
Mike McGlone, the senior commodities strategist at Bloomberg Intelligence, believed that assets such as BTC and gold would see some resistance and price gains in the second half of the year. McGlone noted;
“If stocks go slack, Bitcoin, gold and bonds could dominate the 2H – Bitcoin’s tendency to outperform most risky assets and gold most commodities, could play into the 2H, especially if the stock market continues to succumb to FederalReserve- jaws.”
Likewise, some believe that it takes a longer period of time for BTC to reap its previous gains. CEO of Tallbacken Capital Advisor predicted that Bitcoin price would see even more landfills. He expects BTC price to hit the $15,000 level and says Bitcoin’s long-term momentum has become shaky.
Featured image from Pixabay and chart from TradingView.com