We have previously determined why the bitcoin price is likely to continue falling. From our perspective, the scenario stated is the most likely. In the same piece, I would like to highlight the steep decline in "wild projections" for bitcoin over the past few months. If you recall, only a slacker did not forecast last year's bitcoin price of $ 100,000 per coin; some discussed $ 500,000 for several years. Where are these specialists now?
Additionally, we would like to remind you that the bitcoin market is dominated by long-term investors (big institutional players) and tiny traders. Since this is one of the tenets of proper investment, the former can afford to keep bitcoin on the balance sheet for many years while the latter enter the market to make the quickest profit. Since making a profit in a declining market is impossible, it is only natural for sellers to depart. This is confirmed by the Glassnode research, which states that only institutional and long-term investors remain in the market today. And now, we recall that there were already fears of the cryptocurrency market collapsing last year. However, many experts predicted that institutional and long-term investors would easily weather the exodus of "hamsters" and speculators and purchase all of their coins. Why did this not occur?
Large players' options are restricted, and they cannot afford to purchase all the coins back. If this were conceivable, bitcoin would be concentrated in the hands of a very small number of investors and lose its meaning of existence, as it was designed as a substitute for fiat currency, that is, as a medium of trade and payment. How can it be utilized for transactions if only a select few possess it? As it turned out, "hamsters" and speculators also had substantial crypto assets, so demand could not keep up with supply when these currencies flooded the market in significant quantities. Thus, another widely held belief is that bitcoin will never fall again because it has previously fallen after each "bullish" trend proved false. Many investors are awaiting significantly lower prices, at which point sales may restart. Nevertheless, we feel that these levels have not yet been achieved at this time. And given the basic and geopolitical contexts explored in the two preceding articles, this may not occur until the end of 2022.