What will happen to Bitcoin
For his part, Marcus Sotiriou, an analyst at GlobalBlock, analyzed data from on-chain analytics firm Glassnode showing that Bitcoin is approaching a region that is below the average cost of all holders on the blockchain. “Previously, when bitcoin entered this region there were four buying opportunities”he explained. “Both of these indicators suggest that the cryptocurrency markets might be close to bottoming out in this bear market that we find ourselves in,” the expert added.
By contrast, There is no lack of warnings from analysts who believe that the digital asset is simply waiting to start its next bloodletting. Popular bitcoin critic Peter Schiff called this a classic bull trap for investors. In one of his recent Twitter posts, Schiff mentions: “I must admit I’m surprised bitcoin has held up so well. But don’t get cocky #HODLers. The market never gives investors that much time to buy dips. It’s More likely this is a bull trap to lure in as many buyers as possible before the next major leg down.”
He continued: “Rising #grocery and gas prices will put more pressure on bitcoin prices. That’s because groceries and gas stations won’t exchange their food or fuel for bitcoins. So if Bitcoin #HODLers they want to eat and drive they will soon be forced to sell their precious ‘stash’ in order to afford it.” This will ultimately mean that bitcoin might crash even below $20,000.
At the beginning of 2022, the correlation coefficient between Bitcoin and the Nasdaq index marked the highest figure since 2011. Since then, market analysts understand that cryptocurrencies continue to be part of the technological ecosystem.
When the economic cycle is expansionary and large companies grow and improve their profits, share prices grow and the market trend is consistently bullish. On the other hand, when the crisis arrives, interest rates rise, inflation accelerates and the probability of creating a recession increases, then the technological ones fall. And if bitcoin is correlated at a high level, so will it.
Therefore, for now, the short and medium term statistics show that bitcoin and other cryptocurrencies may not be the definitive refuge of value as proposed by the hard core of the crypto community.Rather, they would be procyclical assets that simply rise to a greater or lesser extent than technology stocks.
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