Bears Are Taking Over To BTC
After a small loss of around 0.5% over the course of Tuesday, Bitcoin has found itself retreating to the lower end of the $23,000 range it had established. Ethereum, on the other hand, has managed to gain some strength over the past day, increasing by 2.7% to reach $1,630. As for altcoins, they have been all over the place today, with some coins seeing a loss of 3.8% (Solana) while others experiencing a gain of 2.6% (BNB).
The cryptocurrency market is always in a state of flux, and last night was no different. Capitalisation rose by 1.1%, according to CoinMarketCap, and the Fear and Greed Index added 3 points to hit 34. These kinds of changes are to be expected in such a volatile industry, but they can still be tough to keep up with.
We’ve studied previous crypto market cycles and come to the conclusion that even if the bottom is passed, there could be a prolonged lull and an uneven recovery ahead. After a long lull, there tends to be a powerful year-long surge – like we’ve seen in early 2017 and October 2020.
The cryptocurrency industry is now entering a stress testing period, in which only the most viable projects will survive. This is due to falling real incomes in much of the global economy. People will be less inclined to seed investments in cryptocurrencies if their wages are not keeping up with inflation.
For the first time in three months, the value of USDT has increased, possibly signaling good news for the cryptocurrency industry as well as a consolidation of growth. However, it could also be an indication that more people are interested in conducting transactions outside of the traditional banking system. This could be due to sanctions against Russian banks or a declining confidence in traditional finance in less developed parts of the world.
Some people in the crypto world are beginning to wonder if bitcoin’s recent rally is sustainable. They point to on-chain indicator data, which has not improved much in the past few days, and online activity which remains subdued.
However, the CEO of Morgan Creek says that bitcoin will not enter a new growth phase until 2024, when the halving will take place. He believes that the cryptocurrency’s current price is too low; a fair price for BTC should be around $30K.
