January will be the worst month for Bitcoin since 2018
The year 2022 had one of the worst starts in the history of Bitcoin price performance as digital gold lost nearly 30% of its value at its low of the month, but the near-term recovery has softened things, Bloomberg reports.
During trading days in January, Bitcoin fell to $33,000, while it traded close to $70,000 in November. The market sell-off was driven primarily by the risk of the Federal Reserve’s rate hike, which is putting the entire financial system in risk mode.
As the majority of traders tried to avoid exposure to risky assets such as Bitcoin and altcoins, their value began to decline rapidly as the majority of retail traders shifted their focus from digital assets to safer options.
According to a chief market strategist at FS Investments, cryptocurrencies still remain highly volatile assets, and it remains a “much trickier” environment than it was six months ago. Numerous experts previously noted that the digital asset market has matured compared to 2017 and 2018.
Changes in macro sentiment around risky assets are also confirmed by a report from CryptoCompare, in which analysts state that digital asset-related investment products have seen significant outflows since August. Assets under management for Bitcoin or crypto-related products also decreased by 23%.
But as experienced traders and investors in the industry pointed out, there is nothing surprising in the 50% retrace in such a volatile market as Bitcoin’s, and other cryptocurrencies have already gone through a similar correction period, in 2013, 2018 and even in the summer. from 2021.
At the time of writing, Bitcoin is trading at $39,000, which is the highest point for digital gold since January 21.