2022 Bitcoin (BTC) did not start well. But the short-term recovery has softened things, according to Bloomberg.
With the January dips, Bitcoin had its worst start to a year since the start of the 2018 “crypto winter”, according to Bloomberg. According to the data, the largest cryptocurrency by market cap has been mostly bearish this month. Other digital assets have also suffered, and Ethereum is down roughly 30% since the end of December. BTC’s monthly drop is now more than 18%, the worst start to a year since the 29% drop in 2018 this January.
In January, Bitcoin fell as low as $ 33,000, while in November it was traded at about $ 70,000. The sell-off in the market was driven by the risk of the Federal Reserve’s rate hike. While the majority of investors tried to avoid investing in assets they consider risky, such as Bitcoin and altcoins, the value of the cryptocurrency market began to decline rapidly as most retail traders shifted their attention from digital assets to safer options.
According to a chief market strategist at FS Investments, cryptocurrencies still remain highly volatile assets and the current situation remains a “much more difficult” environment than six years ago. Previously, many experts stated that the digital asset market has matured compared to 2017 and 2018.
The change in macro sentiment around risk assets is also corroborated by a report by CryptoCompare where analysts noted that investment products related to digital assets have been facing huge exits since August. Managed assets for bitcoin or crypto-related products also fell by 23%. But as seasoned traders and investors in the industry have pointed out, there’s nothing surprising in a 50% pullback in a volatile market like Bitcoin, and other cryptocurrencies went through a similar correction period in 2013, 2018, and even the summer.
At the time of writing, Bitcoin was trading at $ 38,300. Bitcoin touched 39,000 in the day today. This is the highest point for digital gold since January 21.
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