It’s the first day of the week, and all indicators show that the Crypto market is on a downward trajectory. The bearish trend is a pointer that the Crypto winter is unlikely to reverse in the short term.
On Friday, Bitcoin hit an intraday low of $19,061 before a correction and subsequent week closure at $19,250. According to Coinmarketcap, the magnitude of transactions was low on the weekend, resulting in the plunge losing its downward momentum. The largest Crypto is now trading at $19,200, aggregating to an 8.88% 7-day plunge.
Following the trend, the market capitalization has shed off $7 billion over the weekend and is now at the $871 billion mark. Analysts do not anticipate recovery to $1 trillion in the short term as the global economy reels from inflation and supply chain shocks. Over the last few years, the integration of Crypto into the financial system has been tremendous. Hence, the Crypto market trends correlate to financial market cycles.
The Intrinsic Factor Supporting the Bears
BTC supply in exchanges is irregular. A low supply of Crypto, for instance, increases the price equilibrium. Whereas a high supply of sale orders exerts downward pressure on the Crypto market.
On Friday, the volume of Bitcoin transactions surged to $32,386,892,691, with 1,698,000 BTC being traded out of a total supply of over 19 million tokens. During the weekend, transactions volume fell to $16,850,903,867 (877,154 BTC) on Sunday. Despite the low volume, BTC shed off 0.75% value in the last 24 hours as investors’ activities remain low.
The Most Traded BTC Pairs are for Stablecoins and Fiat Currencies
The most active BTC pairs are the USD, BUSD, JPY, EUR, KRW, USDC, and USDT. However, the ETH/BTC pair is the second most popular Bitcoin pair on Binance. The ranking shows that capital is flowing out of the market. Some risk-averse investors are also opting for Stablecoins, whose price remains stable at $1.
One factor that makes a Crypto popular on an exchange is liquidity. Investors prefer a liquid token that can trade against a Stablecoin or fiat money. Besides Stablecoins, Bitcoin is one of the most liquid Cryptos, which is why it dominates the Crypto space. There are various online and ATM points of exchange where Bitcoin users can buy and sell BTC. Crypto is also accepted in most retail transactions, which is why it dominates the Crypto space.
It Might Be a Buyer’s Market for The Short Term
Buying the dip may be a short-term goal for investors as there seems to be no end to the factors that precipitate the bearish cycle. For instance, inflation remains very high globally as energy and food prices skyrocket. Nonetheless, hodlers are still better off financially as Crypto is deemed a long-term investment set to recover.