After Terra, People are Now Preparing for Bitcoin’s Death

Terra

Terra

Has the cryptocurrency price crash also increased the chance of a possible Bitcoin rally?

Total crypto market capitalization has plummeted below US$1 trillion for the first time since February 2021, with Bitcoin and other top altcoins registering record losses. BTC, especially, has begun the week at its 10-month lowest since May 2021. At the time of writing, BTC is struggling to keep itself afloat at the US$24,000 mark, down by 13% from the previous day. Multiple macro-economic factors have contributed to the latest dump. Many investors are now wondering how low BTC can go before there is a change in sentiment and price trajectory for the crypto asset class.

Bitcoin down as much as 17%, fell to as low as US$22,603 on Monday, putting it squarely below the average investor cost base of US$23,500, according to UBS. That means prices have declined enough to test even long-term holders, who up until now in the 2022 drawdown were largely in the green with their investments.

“Bear-market blues have set in among even the most ardent crypto proponents,” said James Malcolm, head of foreign exchange and crypto research at UBS. “Capitulation can come in many forms. Equally, relief too as we are now in full-blown panic mode, and the bar for a hawkish Fed this week is pretty high.”

Bitcoin price plummeted Friday after CPI data from the United States indicated inflation was far from slowing down. The CPI, the most widely used measure of inflation in the United States, is now up 8.6% year-on-year, pushing prices down sharply.

While the recent bearish move has kept some crypto buyers on the sidelines. Has the price crash also increased the chance of a possible Bitcoin rally? Currently, BTC is trading at around US$21,000, with the possibility of further declines. The coin is down more than 17.45% in the past 24 hours.

Bitcoin investors have been accumulating BTC at an exponential pace over the past several weeks. According to reports, the number of Bitcoin wallet addresses that contained one BTC token or more increased by over 13,000. The total number of ‘wholecoiners’ rose to almost 800,000. This price action was perpetrated at a time when the BTC price suffered new lows. Within the past seven to ten days, the price of Bitcoin plummeted below US$30k, and reached further down, stabilizing itself at around US$19k to US$20k. The crypto market was in a free fall. Analysts who monitor the movements of digital assets concluded as a joke that the token might end up losing all its value and land at US$0.

Since Bitcoin fall below the US$20k mark, most investors have chosen to sell off their investments in hopes that they would be able to generate more profits from other forms of investment assets or other cryptocurrencies than Bitcoin. But fortunately, BTC has recovered back. At the time of writing this article, the crypto is trading at US$21,000, according to coinmarketcap. As investors continue to remain on edge due to all the negative news headlines based once cryptocurrencies and the rising inflation, they are also not backing down on utilizing this opportunity to buy the dip. It surely might enhance the market relevance of Bitcoin to new highs once again.