On Wednesday, the price of Bitcoin plummeted to a new 52-week low of $20,800. Despite the fact that the price has risen beyond $21,000, there are signals that the bears are still in charge of the market.
Miners are selling Bitcoin
On Monday, the total amount of Bitcoin mined and sent to multiple exchanges hit a seven-month high of $9,476. It’s possible that they’re selling in anticipation of a price decrease.
Bitcoin miners’ operations are frequently influenced by larger market sentiment. To prevent losing money, they usually sell their possessions. A rise in the number of miners selling has coincided with a reduction in mining profitability.
Mining profitability has decreased by 75% since its peak. Bitcoin has also plunged to roughly $0.0950 per thousand hashes, its lowest level in more than a year. Miners are also sending money to exchanges in greater numbers. The fact that miners are feeling forced to sell is a good thing. This action indicates that they are down on the price and are attempting to sell.
Many mining machines have become uncompetitive since the price of Bitcoin has dropped below $21,000. If the price does not rebound, these businesses may be compelled to shut down. The price behavior of other cryptocurrencies was similar to that of Bitcoin.
Bitcoin has gone through multiple bull cycles in the last decade. During these cycles, Bitcoin’s price fell by 80 percent to 90 percent from its high. However, it has never fallen below its all-time high. It is currently trading near its 2017 high of over $20,000. If Bitcoin’s price continues to decrease, it may be forced back into 2017 territory.
Investors in Bitcoin continue to be optimistic
The price of Bitcoin/USD climbed after hitting a high of $20,079 on Bitstamp, according to TradingView statistics. It subsequently came to a halt and reached $21,700 in the United States. The S&P 500 and the Nasdaq Composite Index both rose 1.4 percent and 1.6 percent, respectively, as the US share market started higher.
The majority of pundits had priced in a rate rise at the Federal Reserve’s meeting on Wednesday, which contributed to the Fed’s regained strength.
Cryptocurrency performance has been the worst hurt in the inflation environment, according to Mike McGlone, a commodities strategist at Bloomberg. He pointed out that although Bitcoin and other cryptocurrencies continue to plummet in value, commodity prices, such as oil, have soared.
According to him, the recent record jump in crude oil prices is a strong indication that inflation is on the rise and that the Fed would likely hike rates shortly. He also stated that the central bank’s rate rise path might result in a major drop in consumer sentiment.
30% plans to Hold Bitcoin
According to the Bank of America’s poll, 30% of respondents own cryptocurrency. They stated that they had no plans to sell their holdings this year. Instead, they’re holding out for a better deal. Despite the negative press surrounding cryptocurrencies, some investors believe the market will return. They continue to hope for a comeback despite the lack of a clear end to the trend.
The attitude around cryptocurrencies, according to BoA, is favorable, indicating that there is still hope for the business. However, he cautioned investors to remain careful in light of the recent FUD.
Almost half of those who have already used digital assets say they shop online. They feel that purchasing digital assets is a method of paying for goods and services rather than a store of wealth.