- The Bitcoin market continues to fall apart on Thursday, as the markets are running away from crypto in general.
The Bitcoin market continues to fall during the trading session on Thursday as we are now well below the $70,000 level. All things being equal, this is a market that I think probably finds the $60,000 level before it’s all said and done. The acceleration of selling pressure is truly impressive, and I think now we can look back with the $3 billion in outflows from US spot ETFs in January really being a sign of just how bad things are.
Firm Glassnode reports that Bitcoin is in a defensive phase, showing bearish on-chain and off-chain metrics. Unrealized gains are down and realized losses continue to increase as investors cut exposure. It is a market that is now dropping below its 365-day moving average, which signifies a shift from bullish to bearish behavior, with the current decline much more severe than we had seen in early 2022.
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A Shift Toward Crypto Winter
The question now isn’t so much as to whether or not we are going to continue selling off. It’s possible that we could drop down to the $50,000 level for that reason. I would assume that there should be some support there. If that gives way, we’re looking at a complete and utter implosion. Keep in mind that the institutions out there that had been involved in Bitcoin and getting their clients into Bitcoin have now lost their money, so institutional traders typically will take their losses and move on.
Right now, I don’t really see a bullish case for Bitcoin and if that’s going to continue to be the case, the game may be up for a while. We may enter a severe crypto winter, which I think eventually we will probably head back towards. But with the Federal Reserve being as stubborn as it has been, as well as other central banks, I think Bitcoin continues to be very bearish going forward and I just don’t see a turnaround anytime soon. What this market needs is several months of sideways and boring action to build a base from.
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