Why is market sentiment for Bitcoin (BTC) currently so low?
Bitcoin is currently ‘languishing’ at slightly below $65,000. The Fear and Greed Index is neutral, and bears are yelling from the rooftops that the price of $BTC will be rejected from the peak of its bull flag once more, this time plummeting down to considerably lower values and possibly into bear market territory. Why is there such a negative reaction towards Bitcoin?
A sequence of short-term corrections.
Since climbing out of the last bull market, the $BTC price has experienced many corrections of up to 20% or so, with a maximum duration for each few months.
This time is different. The $BTC price has not only experienced a 27.5% correction, but it has also taken far longer – 140 days is the current duration, more than doubling the number of prior pullbacks.
So, why is this still considered a correction rather than a sequence of lower highs and lower lows that will eventually go to far lower levels?
Anything is feasible for any asset in terms of market price. So, certainly, it is possible that $BTC will plummet. Nonetheless, Bitcoin remains in a bull market, and the trend will continue until it stops. That point has not been reached, so it is out. Bitcoin a huge 91% gain in a short period of time needed a lengthy corrective.
Furthermore, following the previous slump, which concluded on January 23, this year, the $BTC price skyrocketed, gaining 91% in just 30 days – a massive increase in such a short period of time for any asset.
Following such a significant gain, there was sure to be a much longer period of consolidation and accumulation, and it appears that we are getting it. The longer the $BTC price consolidates, the higher the eventual target price after a breakout.
The global liquidity cycle is turning upward.
These are purely technical remarks. It’s also worth considering that the global liquidity cycle just starting to bend upwards. Certain central banks have already begun to decrease interest rates, and the Federal Reserve hinted yesterday that a September rate cut was possible.
Massive debts should be rolled over.
You may add to this the enormous amount of debt that is stacking up around the world, particularly in the United States, where debt has recently surpassed $35 trillion. To service these obligations, another massive round of fiat currency production will be required, signalling the start of an upward trend in the liquidity cycle.
Institutions have finally caught on.
Finally, the primary reason to be bullish on Bitcoin is because it is the world’s most difficult asset. Only 21 million bitcoins will ever be mined into existence, 19.5 million of which are already in circulation, while 5 to 6 million have been lost and will never be recovered.
It looks that some of the major institutional investors have finally recognised the value of this asset, with Blackrock and others buying $BTC hand over fist on behalf of their large corporate clients.
Sovereigns are about to follow suit.
And that is not all. As sovereign states begin to quietly make their moves, game theory may emerge. Just like gold, the countries with the most can reserve their position at the global financial table. Once it become clear that some countries are buying, the will be
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
x : Cryptomantr