In short: The ongoing bear market in Bitcoin is the longest in its history, with prices down almost 55% from their all-time high. However, recent developments suggest that the bottom may be in. Despite falling prices, the network's hash rate remains high, indicating strength and security. There are also reports of BlackRock's application for a Bitcoin exchange-traded fund being accepted, which could potentially strengthen prices. The approval of an ETF may mark a turning point for Bitcoin.
Our quick analysis:
Introduction:
The rollercoaster ride of Bitcoin's price has captivated investors and enthusiasts for years. However, the ongoing bear market seems to be testing even the most patient of crypto believers. Fear not, my fellow crypto enthusiasts, for there may be a glimmer of hope amidst the sea of red charts and bearish sentiment. Let's take a closer look at the current state of Bitcoin and the factors that may suggest the end of this prolonged downturn.
The Longest Bear Market:
According to Glassnode data, the bear market that Bitcoin is currently experiencing is the longest in the network's history. Since its peak in November 2021, with prices surpassing $69,000, BTC has seen a significant decline. As of July 18, 2023, Bitcoin is trading around the $30,000 mark, marking a staggering 55% drop from its all-time high.
Echoes from the Past:
However, if history has taught us anything, it's that Bitcoin has survived previous bear markets. In fact, this is the second-longest phase of underperformance for the coin. From 2015 to 2016, during the early stages of Bitcoin's liquidity building, the cryptocurrency remained in a depressed state for 386 days. And, who can forget the crypto winter of 2018 when prices plummeted to as low as $4,000?
Influential Factors:
The prolonged bear run of 2021 can be attributed to various fundamental factors. One of the key influencers is the intervention of the U.S. Federal Reserve, which took measures to combat inflation by raising interest rates consistently. Additionally, the collapse of major crypto firms, including 3AC, FTX, Voyager, and the depegging and crash of UST and LUNA, created an environment of fear and uncertainty.
Hash Rate and BlackRock's ETF Application:
Despite the persistent bearish sentiment, there are silver linings that give hope to Bitcoin enthusiasts. Despite falling prices, Bitcoin's hash rate, which measures the processing power supporting the network, is trending near all-time highs. This demonstrates the resilience of miners who continue to invest in new equipment and strengthen the network's security.
Furthermore, recent news reveals that the United States Securities and Exchange Commission (SEC) has accepted BlackRock's application for a spot Bitcoin exchange-traded fund (ETF). As the world's largest asset manager, BlackRock's potential entry into the Bitcoin ETF space could have a significant impact on Bitcoin's price and institutional adoption.
Looking Ahead:
While Bitcoin may currently appear weak, hovering close to the $30,000 mark, it's important to remember that market sentiment can change in an instant. Whether the approval of a Bitcoin ETF signifies the bottom for Bitcoin remains uncertain, but it undoubtedly highlights the growing interest from institutional investors.
In conclusion, the ongoing bear market has tested the faith of many Bitcoin investors. However, historical patterns, the resilience of the hash rate, and potential developments like BlackRock's ETF application suggest that we may be witnessing the beginning of a market turnaround. As the famous saying goes, "The bigger the bear, the sweeter the bull."
Note: The information in this blog post is based on market observations and should not be considered financial advice.
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Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
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