The price of Bitcoin is currently around $63,218, and the
total market cap of crypto has fallen below $2.3 trillion. The prices even
touch $62,700. Platforms like CryptoQuant indicates that the crypto bearish,
with BTC below its one-year moving average. It seems that the prices of Bitcoin
may further fall.
Crypto Winter 2.0
The current situation in the crypto market looks like previous winters, which saw 70-85% corrections, low trading volume, and capitulation events, such as those in 2018 or 2022, which lasted for 12 months. Along with the selling pressure, macroeconomic headwinds are also causing problems for the cryptocurrencies. The Fed rate is expected to range 3.5% to 3.75%. It is enough to suppress risk appetite. Apart from this, Trump’s policies are also resulting in regulatory uncertainty despite Trump’s pro-crypto policies. If black swans such as rate hike or global economic crisis or even slowdown hit the economy, Bitcoin will become weaker leading to fall in volume which would freeze the market.
Future Outlook
However, the fact in the present-day crash in the Bitcoin
price is retail-led crash as the institutional holders possess 5% of the supply
through ETFs and treasuries, providing a floor. So, technically, Bitcoin may
not fall further if bull sentiments rise.
The supply of Bitcoin has slowed down to half of 2024 level.
It is becoming scarce like gold! Also, the institutional liquidity is low and
the rise in the prices of Bitcoin was basically retail mania. However, the ETF
may be a support for Bitcoin. Also, the future of Bitcoin depends on fiat
currencies. If fiat currencies strengthen in coming days, Bitcoin will face
problems.
Dr Rajeev K Upadhyay
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