The Bitcoin market has seen significant price volatility, especially after the US central bank issued the largest interest rate hike since 1994.
Despite this, bitcoin has managed to stay above $20K, while many leading altcoins including Ethereum, XRP, Solana, Cardano, and Doge are in the red.
According to digital asset management CoinShares, crypto funds suffered withdrawals of $102 million last week, owing to investors’ expectations of stricter central bank policy. The worldwide crypto market is now worth less than $900 billion, down from a high of $2.97 trillion in November.
Bitcoin price outlook
After breaking below the $30K support level, the pioneer crypto price has been in free fall for the previous few days. It’s now nearing the vital level of $20K, so it’s critical to observe what the immediate consequences will be.
The market has already entered the probable bottom zone, with the Realized price at $23K and the Delta price at roughly $16K. A bottom formation, however, could take a year or more, given the current global macroeconomic and geopolitical circumstances, as well as previous Bitcoin cycles.
When the market climbs above the Realized price, the bottom accumulation phase ends, and the bull market begins when the price successfully breaks above the 200-day moving average (now at $40K).
After a major crypto lender, Celsius, suspended withdrawals and transfers between accounts this week, raising worries of a larger impact in digital asset markets already unsettled by the loss of the TerraUSD and Luna tokens last month, digital assets have taken a beating.
The crypto industry was jolted last month by the implosion of the Terra ecosystem, which saw its algorithmic stablecoin UST lose its dollar peg, wiping out billions in investor equity.
The industry’s crisis is spreading as traders flee the asset class that has long been associated with speculative trading and cheap money. As prices continue to fall, more investors are predicting that losses will worsen.
Furthermore, investors are hedging their bets as the Fed’s highly watched GDP tracker indicates that a recession is looming, and economists expect the Fed’s aggressive hiking cycle to stifle already sluggish economic growth.
Several major crypto companies, including Coinbase, the largest digital asset exchange in the United States, Gemini and BlockFi, a lending platform, have announced layoffs, adding to the market’s volatility.
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