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Investors Hanging on Even in Crypto Winter
The cryptocurrency market has found 2022 to be unfriendly. The market has been in a long-term bear trend, with Bitcoin, the leading currency, falling down 70% from its all-time high in November 2021. Nevertheless, investor interest in Bitcoin has not been destroyed by market apprehension. According to data, even during the crypto winter, more than half of investors remain in their BTC investments.
The statistics analyzed by the blockchain analytics company TipRank show that 62% of BTC addresses have not sold any of their BTC holdings in a year or more. Furthermore, according to site statistics as of September 1, 32% of investors liquidated their BTC holdings in the preceding year. Investors were under pressure to sell during the market downtrends, and this pressure persisted at the moment. In a recent analysis, blockchain research highlighted that BTC deposits at exchanges had decreased to a 2-year low of 1,921 BTCs in terms of seven-day average movement.
The Constant Rate Surge
Notably, the bloodbaths in 2017 and 2019 pale in comparison to this winter’s plunge in cryptocurrency values. Although bubble bursts triggered the previous downtrends, macro causes are to blame for the present gloomy trend. The Nasdaq sell-off of 22% and the TerraLuna collapse generally destabilized market confidence. Then, the U.S. Federal Reserve seemed to be able to contain inflation with its hawkish stance, and ever since then, rates have been rising. And when the Fed increases interest rates, the market experiences more sell-offs, which further drives down prices.
Bitcoin is finding it difficult to maintain its position at above 20,000 USD in the present market environment. As of this writing, the price of BTC is $20,065, down 0.70% from the previous day. However, in light of the Fed’s harsh statements, Bitcoin is presently navigating the inflation environment. The BTC price fell below $20,000 in June as a result of the Feds rate hike, but it quickly began to recover and reached the $25,000 mark. Alternatively, in reaction to the most recent Fed activities, the price of BTC has remained low.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
