Bitcoin Bear Market Not Going Bullish Anytime Soon: Report
The current crypto winter has left bearish sentiments on Bitcoin and other crypto assets in the market. As a result, several, if not all, asset values are bottoming out, leaving massive losses for private and institutional crypto investors.
Experts have released several speculative analyzes regarding the ongoing bear market, including the state of Bitcoin and possible future expectations. The Bitcoin price remains at the $19k level, never exceeding $24k in recent months. Following the current price trend, a prolonged decline is possible.
Reason one: Lack of demand and activities in the Bitcoin Futures Market
Market analysis believes that the Bitcoin market may not end soon with the current trend. A CryptoQuant analyst said that the lack of demand for Bitcoin is one of the signs that asset prices are not rising soon.
The analyst highlighted the funding rate in the BTC futures market. He explained that BTC funding rates turned negative when the Bitcoin price dropped from the $22k level and stayed at the $19k level.
The CryptoQuant analyst further noted that the metric’s values are significantly lower in 2022 than in 2019-2020. It indicates low demand and activity in the futures market, causing a consolidation period and range phase.
The analyst recommended careful monitoring of the metric’s values, especially in the short term, with justification. He said extreme negative values could increase the possibility of a short squeeze, which could lead to a price reversal for the cryptocurrency.
Reason two: Short-term sentiment remains bearish
Another CryptoQuant analyst said that chain participants’ short-term sentiment remains bearish. The analyst explained that the bearish sentiments exist because the Spent Output Profit Ratio (SOPR) in the short term is below one (1).
The analyst said that anyone who bought Bitcoin holdings after the December 2020 BTC high is at a loss. For this reason, it will be difficult for long-term holder SOPR to turn positive soon. In today’s market, short-term SOPR is more informative than SOPR/SOPR, which combines long-term and short-term data.
Although the Bitcoin bear market comes with periodic price declines and reduced volatility, it presents an opportunity for new BTC investors. Buying when prices are low and holding until prices rise is one of the trading strategies in crypto.
DBS Bank, a financial services provider in Singapore, said Bitcoin remains an unbeatable investment opportunity despite the bear market. DBS senior vice president and investment strategist Daryl Ho commented on the matter.
Daryl said he believes Bitcoin is unique regardless of the price changes. He further said that the central clearing party’s trade verification makes crypto investments a better opportunity than fiat investments.
The DBS chief said the fiat money system is governed by central banks, while trades in cryptoassets are verified via a central clearing party. He also cited BTC’s 13-year record as a boost to investor confidence.
Meanwhile, Bitcoin still maintains its $19k level and is currently trading at $19,530 with a low of $19,118.
Featured image from Pixabay and chart from TradingView.com
