The entire crypto sector is in the grip of fear as major industry leaders anticipate that BTC may soon face a major fall.
Although several technical signals suggest that the cryptocurrency has already touched this bearish bottom, some analysts are still skeptical.
Yasin Elmandjara, analyst at Cathy Wood’s ARK Investment Management, commented that riskier assets such as bitcoin could suffer due to the unfavorable macro-economic environment.
Analysis of Elmandjara
To clarify his point, Elmandjara said in a recent Twitter thread that one cannot rule out the possibility that the Federal Reserve will continue to hike interest rates in the face of recession concerns. In such a scenario, it is clear that the price will continue to fall, even though the largest cryptocurrency had its worst quarter in more than a decade.
He further noted that the unrealized net loss (NUPL), which has fallen 17% on an overall cost basis, indicates that further corrections could be made for bitcoin. As per their claims, NUPL may fall to the level of around 25 per cent.
For the first time ever, bitcoin has fallen below its 200-week moving average (WMA) and based on longer-term pricing. This means that the crypto king could be trading closer to another “generational bottom”, according to Elmandjara.
However, despite a severe setback to the industry by the failure of major firms such as Terra, Celsius and Three Arrows Capital, bitcoin’s core fundamentals—network security, network usage, and holder behavior—”appear to be stable.”
Is BTC Down?
The “pull multiple” for bitcoin, a key statistic tied to miners, has fallen to its lowest point in three years. Since the value of freshly minted coins is relatively small compared to the average volume, this would suggest that bitcoin is likely to be minted.
In the largest spot market, BTC is currently trading at $19,600, after a gain of nearly 2.9 percent over the past month.