Bitcoin has officially entered into a bear market. Indicative of this is the massive crypto market liquidations that have been occurring over the last three days. In the last 24 hours, there has been over $900 million worth of crypto market liquidations according to data from crypto analytics platform Coinglass. Close to 80% of the liquidations resulted from traders in long positions getting wiped out.
Bitcoin liquidations have amounted to close to $500 million since Wednesday. The Bitcoin liquidations have been the result of the price of Bitcoin falling from its $46,000 price levels to below $42,000. Bitcoin price is currently at around $41,700, down 3.52% on the day.
Bitcoin market sentiment is now split between bulls and bears
Following the Bitcoin price drop and Bitcoin liquidations, market sentiments have become polarized. Some market observers have declared that Bitcoin is now officially in a bear market. One observer, KSICRYPTO, who previously called the price drop a bear trap has retraced and said that it is a full-out bear market.
Bitcoin investor and skeptic CryptoWhale, who has long been predicting a Bitcoin bear market in 2022 has reiterated that he is not surprised by the price drop. He maintains that Bitcoin has long been in a bubble that is propped up by fake money and fraud. He points out Tether, the issuer of the USDT stablecoin, to be behind this fraud and adds that Bitcoin has very low demand as the only people buying were retail investors that did not know better about the bubble.
Furthermore, he expects cryptocurrency exchanges to start acting up and going offline in an attempt to reduce trading and stop the price of Bitcoin from dropping lower. Despite this, this Bitcoin bear market will drag the price of Bitcoin to under $10,000 according to him.
Is it over for Bitcoin (bBTC) bulls? On-chain metrics shows there’s still hope
In contrast, some market analysts’ are still bullish about Bitcoin. According to “Smartcontracter,” Bitcoin prices are likely to bottom out at around $37,500 and will give a similar structure to the market in 2019. The analyst still expects Bitcoin to clinch $100,000 thousand this year.
i think #btc bottoms anywhere between now and 37.5k and gives us a similar structure to what we saw in 2019 just on a larger timescale, with a run to 100k still on the table for 2022 imo. pic.twitter.com/64WniL0bG1
— Bluntz (@SmartContracter) January 7, 2022
This take is similar to the that of on-chain analytics platform Glassnode. In its recent report, Glassnode explained that Bitcoin was not currently in a bull market judging from slow on-chain activity. However, Glassnode expects that should the number of new entities entering the market continue to increase as it was doing, Bitcoin could gather momentum to enter a bull market again just like the market did in 2019. When this happens Bitcoin price is also expected to recover.