Bitcoin poised to crash further when US stock markets open – expert analysis
The number of BTC exiting various crypto wallets has been on the decline for over a year now.
- More dips may be on the cards for Bitcoin, especially once American stock markets resume trading tomorrow, experts suggest.
- The Crypto Fear and Greed Index has once again slid into the "extreme fear" zone in light of BTC's most recent losses.
- Bitcoin's market dominance index currently stands at just over 40%.
Bitcoin, the world's largest cryptocurrency by total market capitalisation, is once again seeing red after having wiped out its fortnightly losses earlier this week. After having stabilised around a price point of AUD$61,000 (US$44,000) for over 72 hours running, the flagship cryptocurrency is now struggling to hold support around the AUD$53,500 (US$38,500) resistance. At press time, BTC is trading at AUD$54,377.
In terms of what may be driving Bitcoin's negative price action, late Saturday evening, British PM Boris Johnson went on air to reveal that should the ongoing Ukraine-Russia situation continue to escalate in the near term, England would have no choice but to prohibit Russian firms operating within his country's borders from trading in pounds and dollars, thus indirectly showcasing his support for the United States.
Also, with the US stock market closed today – in light of it being President's Day – many experts expect to see an even greater sell off across the board once trading on the S&P 500 resumes tomorrow.
Lastly, Bloomberg Intelligence's chief commodity strategist Mike McGlone, pointed out that the existing issue of inflation and risk asset performance has also continued to grow over the past week or so, adding:
"Bitcoin indicating a rough week ahead - Inflation Unlikely to Drop Unless Risk Assets Do: Most assets are subject to the ebbing tide in 2022, on the inevitable reversion of the greatest inflation measures in four decades, but this year may mark another milestone for Bitcoin."
Bitcoin's position as a long-term SOV continues to grow
Even though Bitcoin has failed to break past its all-important $40,000 psychological barrier since the start of the year, it appears as though nobody is really interested in selling the digital currency, thereby giving more credence to the "BTC is digital gold" narrative.
According to freshly released data by on-chain analytics firm Glassnode, irrespective of its current price volatility, more than 60% of Bitcoin's total supply is still lying in various hot/cold wallets – with there being no indication of these holdings making a move anytime soon.
Extreme fear plagues the market once again
Since cracking the AUD$55,000 (US$40k) zone during mid-2021, the price level has acted as a potent indicator of the market's overall sentiment. On the subject, many independent crypto pundits have noted that each time the value of BTC has cracked the above-said resistance, it has witnessed a major rally.
At present, Bitcoin's most recent losses have seen the Crypto Fear and Greed Index once again fall into the "extreme fear" zone. This is after the metric had risen quite substantially when the market hit a market cap of US$2 trillion last week.
Disclosure: The author owns a range of cryptocurrencies at the time of writing