• Crypto experienced a small dip in early February, but analysts have pointed out that it is still stable with low volatility compared to other asset classes.
• This could be seen as good news, as yields are likely to continue to rise and make it harder for Bitcoin to break the $25,000 level.
• In 2022, crypto assets like Bitcoin saw a sharp decline of 70%, leading to a loss of over $2 trillion in valuation.
Crypto Experiences Sudden Lack of Volatility
In early February, crypto experienced a small dip after weeks of its main assets (such as bitcoin) riding the bull wave and increasing their prices. On or around February 5th, the crypto space fell by a little over two percent and wound up stuck at just over $1 trillion. Despite this seeming bearishness, there were several analysts who felt that things could have been worse due to current high levels of volatility in other asset classes such as stocks.
Low Volatility Could be Good News
Edward Moya – senior analyst at OANDA – explained that it’s rather shocking to see how little crypto is moving considering all the volatility across fixed income, stocks, FX, and commodities. He also suggested that sentiment is still strong enough to keep the industry stable – noting that with yields likely to continue rising Bitcoin may struggle taking out [the] $25,000 level over the short-term. Tech Dev – an analyst known for sharing his thoughts on Twitter – mentioned that when liquidity flows bitcoin moves – so the recent bullish MACD crossing could signal an upcoming BTC impulse.
2022 Was Not Good for Crypto Assets
2022 was easily one of the worst years on record for assets like bitcoin which had risen to its all-time high in November 2021 before plunging more than 70 percent by year’s end and falling into mid-$16K range. The entire digital currency arena lost more than $2 trillion dollars in valuation during this time period due to heavy speculation and bad behavior from players like FTX.
Overall while crypto has not seen huge gains lately it appears that things have stabilized somewhat with low volatility compared to other asset classes suggesting investor confidence remains strong in spite of past losses incurred during 2020-2021. With yields expected remain high its uncertain whether or not Bitcoin will surpass its all time high but if liquidity continues flowing then we may soon experience another major BTC impulse as Tech Dev predicts..