Data Doesn’t Support Bitcoin, Crypto, & DeFi Bear Market Thesis

Bitcoin price makes its way up above $35,500 after defending the downward pressure but still remains in a range.

Following last week’s drop to about $28,800 and yet another test of $30,150, the price of Bitcoin is above $35,700 on Tuesday. However, for now, the leading cryptocurrency continues to trade sideways in the $30k-$40k range despite seeing a deep retracement and the following strength in prices.

“We’re seeing the $30,000 level on Bitcoin being defended quite well with a number of tests at that level over the past month,” said Vijay Ayyar, head of Asia-Pacific at crypto exchange Luno.

“We saw a lot of downward pressure on prices being defended, so this looks quite bullish at this point.”

However, for Ayyar, it’s still too soon to give an all-clear as he said another push down to $30k may not hold because we have tested it numerous times and “there’s only so much liquidity there.”

Ayyar sees $24k-$25k as potential targets after a drop below $30k.

Interestingly, the latest recovery in Bitcoins’ price right from the weekend when the UK financial watchdog sent a notice to Binance Markets Ltd. (BML), an affiliate of leading crypto exchange Binance, to cease regulated activity in the country. On Monday, as we reported, Huobi, one of the biggest crypto exchanges in China, also prohibited users in the country from trading derivatives.

Meanwhile, Pankaj Balani, CEO at crypto derivatives exchange Delta Exchange said,

“We expect bitcoin consolidation to continue for the next few weeks until a decisive move takes place.”

According to him, a deterioration in the global macro environment due to decreasing pace of global liquidity would send the BTC price below the crucial $30k level and challenge 2017 ATH at $20k.

“Until then, bitcoin is likely to be in this range and can set up a classic bull trap above $42,000.”

Debunking The Bear Thesis

While several market participants seem to believe that we are in a bear market. According to Jeff Dorman, CIO at Arca, on learning the bear thesis of industry leaders, funds, and traders, he found “there isn't a lot of substance” in that.

Talking about China’s intent on killing digital assets, Dorman said that China is a very large player in the market, the short-term price declines were warranted given the shock to the system. As seen with XRP and BSV delisting, a huge drawdown was expected, and we’re 6 weeks into this selloff where most assets are already down 40-70%. XRP 0.42% XRP / USD XRPUSD $ 0.37
Volume 935.08 m Change $0.00 Open $0.37 Circulating 49.14 b Market Cap 18.38 b
7 mon Bitcoin and Ether Breaks Trend With Outflows While Altcoins Continue to See Inflows 7 mon SBI Holdings to Launch Japan’s First Crypto Fund; Including BTC, ETH, DOT, LINK, LTC, XRP & BCH 8 mon Ledger Announces Integration with FTX and Coinbase, Launching Crypto Life Debit Card
BSV -0.62% Bitcoin SV / USD BSVUSD $ 61.51
Volume 59.2 m Change -$0.38 Open $61.51 Circulating 19.14 m Market Cap 1.18 b
9 mon “We're Not Going to Talk About” SHIB Listing, says COO as Robinhood’s Crypto Wallet Waitlist Jumps to 1.6 Million 11 mon Robinhood Trading App Rolls Out “Dollar Cost Averaging” for Crypto Investments 1 y BSV Network 'Enduring A Series of Block-Reorganisation Attacks' Sees Hash Rate Crashing Over 52%

“It would be reasonable to argue that we have already bottomed.”

ESG concerns are limited to Bitcoin, but the “dumbest of all fears” is that Microstrategy will be a forced seller of Bitcoin.

While debunking the bear thesis, Dorman also said massive regulatory pressure from the US is “years away” from happening, and the tapering is “not happening anytime soon.”

Retail interest is surely off of ATHs but is still very high, and given the funding being raised currently in the market, institutional interest is surely not lacking, so money is still very much here.

As for the biggest fear that digital assets are reflexive and fundamentals are deteriorating as price declines, while Bitcoin and other cryptos have “no fundamentals,” DeFi, gaming, and Web 3.0 have real users and cash flows, and “the fundamentals have never been stronger.”

Adoption metrics might be lower than May euphoria but quarter-over-quarter, and year-over-year, “the growth is nothing short of phenomenal.”

“While many are calling for a bear market — the data simply suggests otherwise. Whether or not this is enough to attract new buyers remains to be seen.”

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