This week we’ve seen multiple cryptocurrencies take a dive with ETH dropping under $3,000 and Bitcoin hitting as low as $39,000 (4/18/2022), down from its resistance level of $40,000. At the time of writing this article BTC currently trades at $38,950, down almost 10% from the previous trading week.
Traders anticipate further impact to prices due to tightening regulations and poor corporate earning reports due to overvaluation. As Q1 earning reports release in the coming weeks it is likely that re-valuations will take place further damaging the outlook of the financial markets.
Historically with Bitcoin, we have seen major market crashes before, such as in 2018 when BitCoin began its downward trend from its all time high of $19,666 on the 1st December 2017 to just $3322 on the 1st January 2019, representing an 80% loss over the course of the year.
The question stands whether we are about to see 2022 re-enact the 2018 market. Should we see a similar loss of 80% by the end of this year we could expect bitcoin to reach as low as $8,000 by January 2023.
In contrary to this, despite the warnings, Bitcoin whales have been filling their pockets at these new lower price points. Data from BitFinex showed high levels of bid volumes being filled.
More bids being filled… $BTC https://t.co/CKj7zF7yXW pic.twitter.com/cF48gAYxax
— Credible Crypto (@CredibleCrypto) April 9, 2022
Furthermore, another unknown wallet was identified purchasing millions of dollars of Bitcoin each week since March, regardless of price-point, this trading strategy is commonly referred to as ‘Dollar Cost Averaging’ in which the investor has divided up their investment across various purchases of Bitcoin in an effort to reduce the impact of volatility on the overall purchase.
The question stands as to who is right and who is wrong? Market outlook appears negative across the majority of traders, however the actions of whales with deep pockets speak otherwise.
