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The current crypto winter has left bearish sentiments about Bitcoin and other crypto assets in the market. As a result, the values of several if not all assets are on their way to the bottom, causing huge losses for retail and institutional crypto investors.
Experts have released several speculative analysis regarding the ongoing bear market, including Bitcoin’s state and possible future expectations. Bitcoin price remains at the $19k level and has never crossed $24k in recent months. Following the ongoing price trend, a long-term decline is possible.
Reason One: Lack of Demand and Activity in the Bitcoin Futures Market
Market analyzes believe that the Bitcoin market is not going to end any time soon with the current trend. A Crypto Quant analyst said: the lack of demand for Bitcoin is one of the signs that asset prices are not rising any time soon.
The analyst highlighted the funding rate in the BTC futures market. He explained that BTC funding rates turned negative as Bitcoin price fell from the $22k level and remained at the $19k level.
The CryptoQuant analyst further noted that the statistic’s values are significantly lower in 2022 than in 2019-2020. It indicates low demand and activity in the futures market, causing a consolidation period and a reach phase.
The analyst advised keeping a close eye on the metric’s values, especially in the short term, with reasons. He said extreme negative values could increase the possibility of a short squeeze, which could trigger a price reversal for the cryptocurrency.
Reason Two: Short-Term Sentiments Remain Bearish
Another CryptoQuant analyst said that the short-term sentiments of the participants in the chain are still bearish. The analyst explained that the bearish sentiments exist because the short-term Spent Output Profit Ratio (SOPR) is below one (1).
The analyst said anyone who bought Bitcoin holdings after December 2020 BTC high will be at a loss. For this reason, it would be difficult for the long-term holder of SOPR to quickly become positive. In today’s market, short-term SOPR is more informative than SOPR/SOPR, which combines long-term and short-term data.
Although the Bitcoin bear market has been accompanied by periodic price drops and reduced volatility, it presents an opportunity for new BTC investors. Buying when prices are low and holding until prices rise is one of the trading strategies in crypto.
The DBS Bank, a financial services company in Singapore, said Bitcoin remains an unparalleled investment opportunity despite the bear market. DBS senior vice president and investment strategist Daryl Ho commented on the matter.
Daryl said he believes Bitcoin is unique regardless of price changes. He further said that the trade verification from the central clearing party puts crypto investments a better chance than fiat investments.
The DBS manager said the fiat monetary system is controlled by central banks, while crypto asset trading is verified through a central clearing party. He also cited BTC’s 13-year record as a boost to investor confidence.
Meanwhile, Bitcoin is still maintaining its $19k level and is currently trading at $19,530 with a low of $19,118.
Featured image from Pixabay and chart from TradingView.com
