Bitcoin Drops To 18-Months Lows, Has The Market Seen The Worst Of It?
13 Juin 2022 - 4:00PM
NEWSBTC
Bitcoin is once again leading the market in the most recent descent
into the red. This has seen the pioneer digital asset fall to
18-month lows and it has taken the rest of the market down with it.
In such climes, it is usually advised that investors remain calm
but that is easier said than done. Bitcoin which looked poised to
visit the mid-2020 levels has not formed any kind of support and as
such the market continues to wonder if the worse is yet to come.
More Bitcoin Dumps Incoming? With the current bitcoin prices, it is
now well below its 50 and 100-day moving averages. This has
cemented the bearish trend for the digital asset, regardless of any
positive performance over the next few days. In fact, there is
every possibility that the price of the digital asset will most
likely dump to 2017 all-time high levels before there is a recovery
in this regard. Related Reading | Bitcoin Decline Sees Funding
Rates Plunge To Three-Month Lows It is also important to note that
it was said that the cryptocurrency had been at oversold levels,
hinting at fatigue on the part of sellers. However, recent trends
have shown that this was not the case. Rather, it had been a setup
for even worse sell-offs. Due to this, it is most logical to
view the market from the point of view of a prolonged bear market.
Yes, there may be some merit to buying the red right now but if
previous bear markets have taught investors anything, it is the
fact that it can always get worse. BTC price dumps to $23,000 level
| Source: BTCUSD on TradingView.com Also taking into account that
previous bear markets have seen the price of the leading digital
assets dump about 90% in the past. Even with the recent decline,
Bitcoin and Ethereum still remain above these levels. This means
that if they were to dump completely to follow previous trends,
then there might be more pain ahead for investors. Investor
Sentiment In the Gutter With the decline in the price of bitcoin
had come great fear. This has seen the Fear & Greed Index dip
toward historical levels. The reading on the index currently stands
at 11, one of the lowest it has been in recent times. This
indicates that investors do not want to put money in the market.
Instead, they are looking to sell off, even at a loss, to mitigate
further losses. One thing to note, however, is what times
like these have bred in the past. When most retail investors are
scared to go into the market, larger investors tend to take
advantage of this fear and play it for their own gain. Buying up
large quantities of BTC, causing the price to spike once more.
Related Reading | Bitcoin Open Interest Falls As Price Dips
Below $31,000 This puts the whales in automatic profit. But there
is also a risk to following these trends because the spike in price
brought about by such large buys can be easily lost. In such cases,
prices have been known to decline even more compared to their
previous points. In markets like this, caution needs to be applied
to every move made. This is the bedrock of any investing strategy.
Bitcoin’s volatility is legendary and true to form, the volatility
can swing either way, causing profits or losses. Featured image
from Forbes, chart from TradingView.com Disclaimer: The following
op-ed represents the views of the author, and may not necessarily
reflect the views of Bitcoinist. Bitcoinist is an advocate of
creative and financial freedom alike. Follow Best Owie on Twitter
for market insights, updates, and the occasional funny tweet…
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