Bitcoin: do we see the light at the end of the tunnel?

Cryptocurrencies experience a long period of decline which, when it exceeds one month, is dubbed crypto winter. It remains to be seen when winter will end.

In the world of cryptocurrency, the indicators are flashing red (or dark orange at best). Bitcoin is experiencing a prolonged decline that is entering its ninth week.

With a loss of 36% of its value in eight weeks, this drop does not yet reach the two crashes of 2021 which lasted 14 and 10 weeks by causing bitcoin to lose 45 and 47% respectively. If the pattern is typical, then the fall would not be over.

This is the fifth winter since 2017 (and the third since 2021), but the relatively short history of cryptocurrency does not allow specialists to have an accurate view of crypto winters.

An unfavorable context

The current context seems unfavorable to cryptocurrencies, which are now considered a volatile, risky and vulnerable asset class in the face of inflation. Combined with concerns about rising rates and the unstable geopolitical situation, cryptocurrencies no longer seem to be on shopping lists.

Total cash market volume fell to $18.4 billion on Monday, less than half of the annual record seen on May 14 ($48.2 billion). As a reminder, bitcoin is hovering around $30,000 this week after falling to $25,401 when it was trading at $69,000 on November 10.

Against this backdrop, Lindsy Bell, Head of Markets and Currency Strategist at Ally Invest said that “a lot of people are wondering what to do — keep hanging on and hope for better days or take the losses and move on. thing “.

Bitcoin remains a haven for crypto

Despite a Fear & Greed index on Coinglass oscillating around 13 (0 being extreme fear and 100 being extreme greed), bitcoin remains the reference value of the cryptocurrency world. Its dominance rate, the ratio between its capitalization and the rest of the market, jumped to more than 44%, the highest rate recorded in recent months.

If some see this as a sign that traders are anticipating a rise, it is important to remember that the recent collapse of TerraUSD, a stablecoin supposed to remain pegged to the dollar, caused a wave of panic among investors who no longer see these currencies. as a safe haven.

Note: this article is for the sole purpose of informing about the current situation and in no way constitutes a reliable basis for decision-making regarding the purchase or sale of cryptocurrency.

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