Bearish sentiments have been expressed about Bitcoin and crypto assets due to the crypto winter. As a result, several, if not all, assets’ values are on their way to the bottom, leaving massive losses for retail and institutional crypto investors.
Experts offer speculative analyses on the current bear market. These include the state of Bitcoin, future prospects and potential conditions. Bitcoin’s price has remained at $19k, with a steady decline of $24k over the last months. An extended decline of Bitcoin is possible, given the price trend.
One reason: Insufficient Demand and Activities in Bitcoin Futures Market
According to market analytics, the Bitcoin market is unlikely to end with current trends. According to a CryptoQuant analyst, the low demand for Bitcoin indicates that asset prices will not rise soon.
Analyst emphasized the BTC futures funding rates. The BTC funding rate became negative after Bitcoin prices fell below $22k, but stayed at $19k.
The CryptoQuant analyst further noted that the metric’s values are notably lower in 2022 than in 2019-2020. This indicates low activity and demand in futures markets, leading to a consolidation phase and range phase.
The analyst advised close monitoring of the metric’s values, particularly in the short-term, giving reasons. The analyst stated that extreme negative values may increase the likelihood of a short squeeze, which might cause a cryptocurrency price reverse.
Reason two: The Bearishness of Short-term Sentiments
Another CryptoQuant analyst said the on-chain participants’ short-term sentiments are still bearish. Analyst explained that bearish sentiments are present because the SPENT Output Profit Ratio for the short term is less than one (1).
According to the analyst, everyone who bought Bitcoin after December 2020 BTC High is now at loss. It would therefore be difficult for SOPR holders who have been long-term holders to make a profit soon. Short-term SOPR is more useful than long-term SOPR/SOPR in the market. It combines short-term and long-term data.
The Bitcoin bear market is not without its volatility and price fluctuations, but it offers new investors an excellent opportunity. It is possible to trade crypto by buying when it’s cheap and waiting until the price rises.
DBS Bank is a Singaporean financial service provider. It stated that Bitcoin still offers unsurpassed investment opportunities despite the bear markets. Daryl Ho, senior vice president of DBS and investment strategist, commented on this issue.
Daryl indicated that Bitcoin is unique regardless of changes in price. Additionally, he stated that the central clearing-party trade verification makes cryptoinvestments a better option than fiat.
DBS executives stated that fiat money is controlled by central banks and crypto assets are cleared through central clearing parties. He also cited BTC’s 13-year-long record as a boost to investors’ confidence.
Bitcoin continues to trade at $19k, and it is currently trading around $19530, with a low as $19118.
Featured image by Pixabay, chart from TradingView.com