This is Why Bitcoin Price is Hovering Between $45K to $50K For Long Time!
Bitcoin prices still remain within the same braces and continue the same 2021 trend. The new year trade of 2022 was expected to begin with a notable bullish trend, yet the crypto space awaits a breakout. Moreover, yet again the weekly trade started on a bearish note and the BTC price continues to form lower highs and lows.
While most of the predictions of 2021 remained still, 2022 also appears to showcase a similar trend. But why is Bitcoin hovering within very narrow braces? Will the asset be able to break out of the downtrend? Let’s check it out:
No New Players Enter the Market
Bitcoin volatility depends deeply on the retail traders who buy and sell the assets every now and then. No doubt the bull or the whale purchases do impact the BTC price but fail to keep up the volatility rate which is much required for a healthy market. Currently, many bulls and whales are just accumulating at the dip whereas the retail traders remain off the track.
Dropping Bitcoin(BTC) Dominance
Bitcoin dominance has been challenged by the dominance of other altcoins deeply. And hence since the beginning of the 2021 bull run which is also seen as the biggest Altseason ever, BTC dominance is witnessing an extreme downfall. Currently, the dominance has reduced below 40% signifying the building strength in other altcoins. And hence the capital flow which used to be to Bitcoin first is directly flown into Altcoins.
Rise in Stablecoin Accumulation
The USDT and USDC stablecoins have become a more popular trading pair in recent times. The BTC trading pair which was widely used is now limited to the veterans and the oldies. Whereas the newbies prefer the USDT or USDC trading pair as Stablecoins also is seen as one of the safest investment options. And hence stable coin minting witnessed a spike and also the accumulation.
Deep Impact of Future Markets Over Spot
The futures markets are coiling up with many traders are leveraging heavily irrespectively of longs or shorts. The future markets always have a deep impact on the BTC price more than the spot. And hence currently, more than longs, short open interest may have been on rising.
BTC Fails to Create FOMO Rather Falling into FUD
Market sentiments do impact the asset price to a large extent. If the rally is moving towards the north steadily, the price tends to rise due to the FOMO. But the extended consolidation could create uncertainty among the traders who may fall into FUD and eventually end up panic selling.
Overall, the bearish trend continues to hover throughout the market as the BTC price does not show any positive signs. Moreover, the industry experts believe the Bitcoin price to slide towards the new lower levels, maybe below $40K before attempting a larger move. However, the consolidation points towards a breakout, yet the time frame remains the biggest constraint ever.