The current crypto winter has left bearish sentiments on Bitcoin and other crypto assets in the market. 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 have released several speculating analyses regarding the ongoing bear market, including the condition of Bitcoin and possible future expectations. Bitcoin price remains at the $19k level, never exceeding $24k in the past months. Following the ongoing price trend, a prolonged decline is possible.
Reason One: Lack Of Demand And Activities In Bitcoin Futures Market
Market analytics believe the Bitcoin market may not end soon with the current trend. A CryptoQuant analyst said the lack of demand for Bitcoin is one of the signs that the asset prices are not increasing soon.
The analyst highlighted the rate of funding in the BTC futures market. He explained that BTC funding rates became negative when Bitcoin price fell from the $22k level and remained at the $19k level.
The CryptoQuant analyst further noted that the metric’s values are notably lower in 2022 than in 2019-2020. It indicates a low demand and activity in the futures market, which causes a consolidation period and range phase.
The analyst advised close monitoring of the metric’s values, particularly in the short-term, giving reasons. He said extreme negative values might increase the possibility of a short-squeeze, which could cause a price reversal for the cryptocurrency.
Reason Two: Short Term Sentiments Remain Bearish
Another CryptoQuant analyst said the on-chain participants’ short-term sentiments are still bearish. The analyst explained the bearish sentiments exist because Spent Output Profit Ratio (SOPR) for the short-term is below one (1).
The analyst said everyone who purchased Bitcoin holdings after December 2020 BTC high is at a loss. For this reason, it would be hard for long-term holder SOPR to turn positive soon. In the current 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 depreciation and reduced volatility, it presents an opportunity for new BTC investors. Buying when the prices are low and holding till the prices rise is one of the trading strategies in crypto.
The DBS Bank, a financial service provider in Singapore, said Bitcoin remains an unmatched investment opportunity despite the bear market. DBS senior vice president and investment strategist Daryl Ho commented on the issue.
Daryl said he believes Bitcoin to be unique regardless of the price changes. He further said the central clearing party trade verification makes crypto investments a better opportunity than fiat investments.
The DBS executive said the fiat monetary system is governed by central banks, while crypto assets trades get verified via a central-clearing party. He also cited BTC’s 13-year-long record as a boost to investors’ 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