Even though the latest Bitcoin (BTC) dip has investors on edge, analysts seem to think that there is no bear market yet and this correction is natural.
The cryptocurrency market was shaken by the recent downward trend of Bitcoin (BTC), with traders blaming a range of issues as the primary causes of the recent trading pattern.
However, a closer examination reveals that most of the typical culprits have little possibility of bringing the price of Bitcoin (BTC) down to $55,000. Even so, analysts posit that even giants like Bitcoin (BTC) have to take a break every now and again.
Bitcoin (BTC) saw a comparable swift decline back below $55,000 after a spectacular ascent to its all-time high of $69,000. The enormous drop shook the cryptocurrency market, sending practically every chart into the red dive and triggering liquidations amounting to billions of dollars.
It’s only reasonable for the general public to look for reasons for the sudden drop when the biggest cryptocurrency in the world ends up losing so much ground. Even though there is no unanimity on the culprit, the crypto community has been blaming the SEC and its rejection of Bitcoin (BTC) Exchange-Traded Fund (ETF) for the second time now, as well as the supply overhang.
Related: Three Market-Moving Forces Potentially Driving Bitcoin’s Latest Price Drop
The head of market insights at Genesis Trading, Noelle Acheson posits that she disagrees with the circulating opinions over the current Bitcoin (BTC) state, by arguing that “all factors cited are either old news, extremely remote risks, or both.”
Regarding the resolution of Mt. Gox Acheson says that it could potentially result in the distribution of the Bitcoin (BTC) that its trustee is holding. Several others maintain that the thousands of Bitcoin (BTC) that are held by the trustee of the failed exchange could potentially drive the price further down by re-entering the market. Nonetheless, because of the unknown timing of these claims, the risks of Mt Gox have been factored into the price by now.
As Crypto Academy reported earlier this week, with Cardano’s Charles Hoskinson redirecting the spotlight to the vaguery of the United States’ Crypto Infrastructure Bill and earlier debate about its unclear definitions, the market may have been somewhat disturbed. Yet again, Acheson has put investors at ease by confirming that a joint alignment among the industry participants and politicians will surely prompt a re-definition of terms and clarification of the applicability of the bill.
Seeing as none of the aforementioned reasons are significant enough to cause the sideways trading of Bitcoin (BTC), this dip may very well be a called-for or “natural breather.” Price movements even of this magnitude are quite normal in a bull cycle and are not signs of a bear market approaching anytime soon.
Thus, investors can look forward to growth on the horizon.
“The tailwinds for BTC are still intact,” reaffirmed Acheson. “We still have strong development supporting adoption growth. We also have the macro situation, with further evidence that BTC behaves more like a risk asset than an inflation hedge coming in the form of a sharp spike when the news broke that Biden had decided to renominate Jerome Powell – gold, in contrast, dropped.”
Bitcoin (BTC) and other risky assets could potentially incur growth as investors are interested in hedging against inflation, should the short term result in low or negative interest rates.
Also read: DOGE’s “Inflationary Dynamics” Scolded by Ripple CEO