One development that Bitcoin has all the time adopted is that its value has by no means fallen beneath its earlier cycle peak. For all the earlier bear markets, this development has held and has been a type of a beacon in relation to calling the underside of the bear market. Because of this a whole lot of analysts had known the Bitcoin backside utilizing this development.
However, in the current bear market, Bitcoin has broken this development and has fallen beneath its earlier cycle peak. This has led some analysts to imagine that this time could possibly be completely different and that Bitcoin might not see the identical type of restoration as it has in previous bear markets.
Time will inform whether or not this new development holds and whether or not Bitcoin is able to mount a powerful restoration as soon as once more. Nonetheless, it’s undoubtedly one thing that analysts are going to be watching carefully in the months forward.
This time, however, the value of Bitcoin has fallen below its previous cycle peak. This happened when the value of the digital asset dropped below $20,000 and hit a low of $17,600. It has since recovered from this point but it has already set a new precedent: that the value of the cryptocurrency doesn't necessarily always stay above its previous cycle peak.
One potential implication of Bitcoin's recent price drop is that the cryptocurrency could fall even lower. This is due to a number of factors, including the fact that previous cycle lows have always been above 85% of the all-time high. With Bitcoin currently below $19,000, a fall to $12,000 remains a possibility.
Glassnode's report additionally notes that the Mayer A number of had fallen beneath its earlier cycle low. It had beforehand bottomed at 0.511 however this had touched a brand new low of 0.487 in June. The report additionally notes that in 4,160 buying and selling days, solely 2% of buying and selling days have recorded a MM beneath 0.5. This represents a change to the elemental fashions which can be used to worth the digital asset.
Crypto Investor Sentiment Plummets
Investor sentiment has been declining for a while now, according to the Worry & Greed Index. The index has spent one of its longest stretches in the high concern territory and it doesn't seem like this will be changing anytime soon. Interestingly, the index had also closed out the previous month in the high concern territory. This suggests that investors are becoming increasingly worried about the state of the market and are selling off their assets. This could be a sign that a market crash is on the horizon.
The sheer volume of Bitcoin flowing into exchanges last week shows that sell-offs are still the order of the day. This sentiment is also reflected in the alternative inflows. Glassnode alerts shows that there was more than $5.6 billion in BTC flowing into exchanges last week alone. Though the outflows had surpassed inflows, the sheer volumes moving into centralized exchanges indicate that sell-offs remain the order of the day.
Nevertheless, the Tether inflows paint a greater image for the crypto market with $4.3 billion in optimistic internet flows for final week. This means that buyers are shifting their stablecoins to exchanges presumably to put money into different cryptocurrencies, signaling a return in optimistic sentiment amongst buyers.
This is likely because investors see potential in altcoins and are willing to take on more risk in order to get exposure to the upside potential in the market. So far in 2021, we've seen many altcoins outperform Bitcoin, so this move by investors is understandable.
With that said, it's important to remember that the crypto market is still very volatile and risky. While there is potential for significant upside, there is also the potential for losses. Therefore, it's important to only invest what you can afford to lose and to always do your own research before making any investment decisions.