Is Bitcoin Shifting Back to a Bear Market?
Bitcoin’s price has shifted downward since rallying to set an all-time high price in mid-March. The primary concern involves determining how long it will persist.
Bitcoin is acting strange again. In March, it attained a new all-time high of almost $74,000 for every coin. Bitcoin is exchanging hands at $61,555 following the quick and hard. A bear market can be described as an asset priced 20% lower than its latest high.
Bitcoin Drifts from High Price
According to CoinGecko, Bitcoin is more than 18% away from the new high it attained last month. Thus, it is critical to question if people are moving toward a bear market weeks following a bull market. It is also important to question whether the shift is possible.
Instead of evoking data, experts revealed to a media outlet that Bitcoin is currently in a consolidating market. This type of market entails vagueness among investors and an asset that does continue or react to a long-term pattern.
Further, war is not helpful. Bitcoin recently experienced a hit just before a geopolitical event that upset the markets. Things appeared promising on the morning of April 12, when the coin’s price was approximately $71,000. However, it was reported that Iran intended to attack its archrival.
The liquidation of several million in short positions on April 12 was worsened after Tehran proceeded to launch 300 drones as well as ballistic missiles at Israel. James Butterfill, Coinshare’s head of research, noted that different factors influence prices’ downturn. Examples include the Middle East catastrophe and tax harvesting in the United States.
Halving Necessary to Address Inflation
Additionally, he said this was anticipated to reduce prices since it would increase inflation because of increasing oil prices. Therefore, interest rates will continue to be high.
Some investors describe Bitcoin as a secure-haven asset. However, the cryptocurrency has progressed along with ‘risk-on’ assets. In the case of geopolitical risk, investors are more likely to dodge riskier assets and place money into more stable ones, such as gold.
CryptoQuant analysts said that ‘investors have pulled away from Bitcoin as they anticipate the imminent halving.’ Further, they ‘might be waiting for the geopolitical tensions in the Middle East to end prior to re-engaging with the market.’
In the meantime, Bitcoin halving will happen on April 19 and 20. This occurrence will split miner rewards in half, thus curtailing the amount of coins unloaded on the market. The last halving happened in 2020, and according to CryptoQuant research, the market had faced significant hostility before its occurrence.
In an X thread, Blockstream’s chief executive officer Adam Back noted that the present volatility is normal. The pre-halving runup has lower volatility compared to previous cycles of bull-runs. Bitcoin’s strange behaviour resembles what it normally does every four years.
