This year has proven a difficult one for cryptocurrencies, after many seeing all-time highs in 2021. But 2022 has seen plummets, plunges, and a whole lot of red. Still, some hadn’t yet conceded that crypto was in a bear market. But the latest news of cryptocurrency’s north star, Bitcoin, may finally establish the market firmly in bear territory.
The latest in Bitcoin news
Bitcoin fell below $19,000 earlier today, breaching a key threshold. At the time of writing, it has come back above that level, still down 4% though, at a price of $19,161.15. Just this year, the digital currency has fallen 58%, and is down over 70% from its all-time high of $68,789.63 (according to CoinMarketCap), which it hit in November after the 2021 bull run. The leading cryptocurrency faces market pressure as a possible recession is looming.
In communication with CNBC, digital-asset-focused SEBA Bank’s head of research Yves Longchamp said, “Bitcoin continues to be under pressure as other assets are. The mix of high inflation, rising interest rates, and recession weigh on cryptocurrencies.”
Is crypto following the stock market trends?
Although some investors may have initially lauded crypto as an ecosystem independent from the centralized government’s economy, this year we have seen Bitcoin trends reflecting that of the global stock markets. Many of these stock markets are seeing losses. As we come to the midway point of 2022, the S&P 500 saw its worst first half of the year since 1970. The pressures on stocks have affected the price of Bitcoin, which has affected the crypto market as a whole. There is also the issue of inflation, which is causing centralized banks to raise interest rates again, which is causing some unrest and talks of a recession.
Is this the bottom for Bitcoin?
After plenty of hype and also genuine good news in 2021, 2022 has shown the volatility of cryptocurrency. The severity of the price crashes has also caused a liquidity issue among the blockchain tech companies.
When Bitcoin fell below $20,000 in mid-June, Jeffrey Gunlach, CEO of the investment firm DoubleLine Capital made it clear that he didn’t believe that to be the bottom for the coin. He stated, “I’m not bullish at $20,000 or $21,000 on Bitcoin. I wouldn’t be surprised at all if it went to $10,000.”
It remains to be seen whether this is the bottom or not, but it’s certainly a chilly crypto winter.
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