The “boring” -according to analysts- picture that Bitcoin has been presenting lately is not necessarily a negative sign, and there are many who argue that it may indicate that it has reached the “bottom” of the price.
Digital currencies have retreated sharply after a hot run in 2021 that saw bitcoin climb a breath away from $68,990. However, in recent months, the price of bitcoin has stubbornly held around $20,000 in an indication that the volatility in the market has settled down.
Mainstream investment
In fact, over time Bitcoin seems to be becoming an increasingly mainstream investment, as its correlation with equities has increased over time as more institutional investors have invested in crypto.
“Bitcoin has basically been between 18,000-25,000 for 4 months now, which suggests consolidation and a potential bottoming pattern as we see the dollar index going up as well,” Vijay Ayyar, head of international at crypto exchange Luno, told CNBC.
“On previous occasions, like in 2015, we’ve seen BTC down when DXY has topped out, so we could see a very similar pattern playing out here.”
Antoni Trenchev, co-founder of crypto lender Nexo, said bitcoin’s price stability was “a strong sign that the digital asset market has matured and is becoming less fragmented”.
An end to crypto hype?
Cryptocurrencies have recorded a sharp decline this year, losing $2 trillion in value since the peak of the 2021 rally. Bitcoin, the world’s largest digital currency, has fallen about 70% since its peak last November.
The so-called “crypto winter” is largely the result of aggressive tightening by the Fed, which raised interest rates in an attempt to tame soaring inflation. Large cryptocurrency investors with highly leveraged bets, such as Three Arrows Capital, were hurt by the price pressure, further accelerating the market’s decline.
However, some investors believe that the ice may now begin to thaw.
