As the world's largest cryptocurrency, bitcoin fell for eight consecutive weeks, the first time in history. During this time, bitcoin has lost nearly a third of its market value. As of press time, bitcoin fell 3.30% to $29364 / piece, once falling below $29000 within the day.
For nearly two weeks, bitcoin has been hovering around the $30000 mark. Bitcoin prices have fallen more than 50% since reaching a peak of $69000 on November 10 last year and hit a 17 month low of $25401 on May 12. Bitcoin is still the largest cryptocurrency by market value, but the total market value of all cryptocurrencies is currently $1.3 trillion, less than half of the peak of $3 trillion in November last year.
For bitcoin, market indicators such as technology and trading volume are "red lights". The bitcoin market sentiment fear and greed index of data platform coinglass (0 indicates extreme fear and 100 indicates extreme greed) hovers around 13. In terms of broader cryptocurrencies, according to the news and research website the block, as of Monday, the total trading volume of all cryptocurrencies on the spot market of major exchanges fell to $18.4 billion, less than half of the total trading volume of $48.2 billion on May 14 (the latter is the highest trading volume in 2022).
Investors can't help asking whether bitcoin has got rid of the cold winter after falling for eight weeks in a row?
However, given the current global market sentiment and recent price trends, it seems premature to think that bitcoin has found a bottom.
The two sharp falls of bitcoin in 2021 lasted 14 weeks and 10 weeks respectively, resulting in a decline of about 46%. If this is taken as a reference, bitcoin may still have a long way to go down after falling 36% in the past eight weeks.
Joseph Edwards, head of financial strategy at solrise finance, a fund management company, said bluntly: "bitcoin is not attractive to retail investors at present. No one really thinks bitcoin has the potential of 10 times return."
Kavita Gupta, founder of delta blockchain fund, said that the current encryption market adjustment has ushered in a "cold winter" and may last for a year and a half. Kavita Gupta believes that the price of bitcoin may fall to about $14000 due to the cold winter of cryptocurrency.
Scott minerd, chief investment officer of Guggenheim, a US asset management giant, said on Monday that bitcoin is expected to fall further from its current level and eventually fall to $8000 / piece. This means that bitcoin may fall another 70%. "When bitcoin continues to fall below $30000, $8000 is the final bottom of bitcoin. I think there will be more downside for bitcoin, especially in the case of aggressive interest rate hikes and quantitative tightening by the Federal Reserve."
In fact, the current macro background is far from supporting the asset category of cryptocurrency. Investors firmly believe that this asset class is highly volatile and risky, and is vulnerable to inflation. Bitcoin is clearly not on anyone's "purchase list" at a time when rising global interest rates and geopolitical tensions have led to concerns that US stocks may fall into a bear market.
However, in this cold winter, there are also the following signs that bitcoin may usher in a recovery. Although the price of bitcoin has fallen, its market dominance (the ratio of its market value to other cryptocurrency markets) has jumped to more than 44%, a seven-month high.
After the collapse of Terra USD (UST), the world's third-largest stable currency, in early May, investors fled the stable currency. Marcus sotiriou, an analyst at globalblock, a British asset broker, said: "institutional investors are fleeing to a safe place to some extent, to bitcoin, which is the most used by institutions."
In addition, data from the US Commodity Futures Trading Commission (CFTC) showed that last week, bitcoin futures had the largest net long position since the contract was launched in 2018, indicating that traders are increasing their bets on the rise of cryptocurrency prices.