Bitcoin maintains its recent decline. It is expected to record its worst monthly performance since the cryptocurrency market crashed in May.
At 13:40 Singapore time on Wednesday, the world’s largest cryptocurrency was quoted at around US$48,000. It was down nearly 7% yesterday. Bitcoin has fallen back by about 16% this month. CoinGecko’s data shows that the market value of the entire cryptocurrency market has evaporated by about $260 billion during the same period.
As 2021 draws to a close, the demand for speculative investment has weakened. Part of the reason is that the Fed has started to scale back the stimulus measures that have boosted many types of assets this year.
Ben Emons, global macro strategist at Medley Global Advisors LLC stated:
“There are rumors that long Bitcoin positions are being leveraged before the end of the year. This may curb risk appetite in the short term.”
Strategists are looking for clues about Bitcoin’s prospects
Katie Stockton, founder and managing partner of Fairlead Strategies, an independent research company focused on technical analysis, said:
“From the perspective of the Fibonacci retracement level, Bitcoin’s next support level is near $44,200.”
Bitcoin’s decline this month reduced its gains this year to about 65%, but it still outperformed traditional assets such as global stock markets and commodities.
Believers of cryptocurrency expect the Bitcoin bull market to return soon. Believe that it will return to the record high of nearly $69,000 touched last month. Among their various views, there is a controversial claim that Bitcoin can hedge against inflation risks.
Graham Jenkin, CEO of the cryptocurrency exchange CoinList, said in an interview with Bloomberg TV:
“The historical trajectory is very long. Over time, Bitcoin will prove to be a very superior investment asset.”