“Bitcoin still has downside potential,” Yohannes Christian, Research Analyst at Bitrue told Finance Magnates while mentioning that the crypto asset might touch a low of even $12,000 before the end of this year. Christian added that the short-term relief rallies won’t be able to save Bitcoin as the market will suffer more pain in the longer run.
In the second quarter of 2022, Bitcoin witnessed a price dip of approximately 55%, its worst quarterly performance in more than a decade. Amid a massive price correction, fear among retail and institutional holders of the world’s most valuable digital asset touched a record high during H1 2022. Moreover, the fall of prominent crypto firms like Three Arrows Capital, Voyager Digital, and Celsius has raised concerns over the ability of Bitcoin companies to survive the crypto winter.
So, under current circumstances, is the market ready for more pain if Bitcoin dips below $15,000? Liviu Manda, CEO & Co-Founder IMPERIUM, believes that the current market dynamics are more “complex” than ever before.
Macroeconomic Factors
One of the major reasons why the current market plunge in Bitcoin and other cryptocurrencies is different from the previous corrections is that macroeconomic factors like rising inflation, interest rates, and intense geopolitical scenarios are now having a direct impact on the crypto market. Bitcoin has reacted negatively to all these factors in the past few months, which shows that unless we see an improvement in the mentioned elements, Bitcoin and other digital assets will remain under pressure.
“Unlike the last bear cycle, the world is now affected by multiple pronounced crises at once: we have just recovered from the COVID pandemic, but now we are facing a socio-political crisis (the war in Ukraine) doubled by an economic recession, with a historical rise in inflation. This context creates a lot of uncertainty among not only the common population, the small investors, but also institutions,” Manda said.
Long-Term Holders
Long-term BTC holders have always played an important role in the price growth of Bitcoin. BTC’s supply cap of 21 million makes long-term holders even more significant in the crypto ecosystem. However,…
