Bitcoin price dips as major financial meltdown afflicts global equities sector
BTC's ongoing dip comes at a time when the equities market has seen AUD$3.92 trillion of its total cap being wiped out over the past week.
- Amidst rising geo-political tensions, economists have continued to raise their inflation projections for 2022.
- Some analysts are predicting a major global economic collapse (much like the one witnessed back in the 1920s) within the next 90 days.
- Despite the bearish momentum, Bitcoin's monthly profit/loss ratio still stands at a decent +3.6%.
After having scaled up to a price point of AUD$59,400 (US$44,000) a little over 72 hours ago, Bitcoin, the world's largest cryptocurrency by total market capitalisation, has continued to exhibit growing levels of volatility, dipping by -2.3% since 6 March and by over -12% during the last 3-day stretch. At press time, BTC is trading at a price point of AUD$52,026.
The slide comes amidst a global economic meltdown that has seen the global equities market take a major hit. Analysts noted that the sector has lost a whopping AUD$3.92 trillion (US$2.9 trillion) in value since the start of the month with the ongoing Ukraine-Russian war potentially triggering more "stagflationary shock" in the near term. On the subject, independent analyst Holger Zschaepitz, pointed out:
"Economists [have] cut their growth forecasts and raised inflation projections. Global stock markets are now worth USD$110 trillion, equal to 130% of global GDP, which looks expensive for the current situation."
If more such corrections are witnessed within the next few days, experts believe that the cryptocurrency market may continue to face an increasing amount of volatility and uncertainty. In fact, popular pseudonymous cryptocurrency trader Pentoshi opined that there is a chance that a global economic meltdown may be on the cards, akin to the Great Depression of the late 1920s, if things continue the way they are at the moment.
Could Bitcoin turn the tide around?
Contrary to the bearish outlook shared by many pundits, a few popular analysts still believe that the current environment may be favourable for Bitcoin and Ether in the near term. In this regard, a report released by Bloomberg Intelligence late last week reads as follows:
"Most assets are subject to the ebbing tide in 2022, on the inevitable reversion of the highest inflation in 4 decades, but this year may mark another milestone for Bitcoin."
The study further noted that if risk-based assets don't dip in value, to help ease out some of the existing price pressure, inflation measures will most likely "remain buoyant", resulting in central banks raising interest rates with even more gusto over the next few months.
Lastly, founders of on-chain analytics firm Glassnode Yann Allemann and Jan Happel believe that Bitcoin is currently at a "critical juncture" in its annual cycle, claiming that if the flagship cryptocurrency is not able to make a move up to the AUD$58,000-$60,000 (US$43,000-$45,000) range soon, it may dip as low as AUD$46,000 (US$34,000).
Disclosure: The author owns a range of cryptocurrencies at the time of writing