Key Insights:
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Bitcoin’s price saw a close to 56% drop in the second quarter of 2022.
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The global crypto market cap and most of the top crypto assets saw significant pullbacks and rangebound trajectories over the last three months.
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Largely stagnant futures and options markets and low trading volumes have been a bear market constant.
A long and cold winter in the crypto bear market has left participants looking at price charts to seek relief in patterns. Top crypto assets – bitcoin (BTC) and ether (ETH) have been rangebound around their lower support levels for over a month.
This stagnancy in the market has left investors and traders desperate for gains. As another quarter of 2022 begins, the crucial question remains whether the crypto markets could chart a recovery any time soon?
Another Quarter, Further Losses?
Bitcoin’s price action in the month of June was one of the worst monthly price performances in the coin’s history, with BTC price down by almost 38% over the month. The long-term and short term losses have expelled short-term holders and newcomers, leaving behind only the adamant HODLers.
Glassnode analysts, in a recent report, pointed out that last month’s price action by the top crypto competed only with the 2011 bear market for the crown of the worst month on record. For a sense of scale, BTC prices were sub $10 in 2011.
Bitcoin’s price consolidated over the last week coping with the month’s losses, and maintaining a rangebound momentum around the 2017 all-time-high price of $20,000.
Over the last week price traded down to brief mid-week lows of $18,741, before rallying to close at $19,139 as the week closed. At press time, bitcoin traded at $19,926 noting 4.20% gains on the daily price window.
With the top asset trading, 71.20% lower from its all-time high price of $69,000, the current price action still maintained in the tight higher $21,600 and lower $18,550 range.
Can Bitcoin and Ether Losses Follow?
Despite the new quarter taking off, there weren’t any positive changes in the larger sentiment of the market. In fact, to the surprise of many newcomers, analysts believed that bitcoin and ether could be poised for further losses over the coming weeks.
After half a year, BTC and ETH were worse than they were a year ago. Both bitcoin and ether closed Q2 2022 with negative quarterly gains as the macroeconomic environment in the financial markets worsened.
The Federal Reserve continued to hike interest rates while aiming to curb inflation; however, this approach severely impacted the growth and market cap of risk-on assets like crypto. With recession worries on the rise, cryptos could face a tough time ahead.
Japanese financial services giant Nomura revealed in a note on Monday that major economies could enter recession ‘in the next 12 months amid tightening government policies and higher costs. Such recession narratives have also sparked fears among investors and traders.
Notably, bitcoin saw a quarter-to-quarter loss of over 57%, while ether dropped by more than 67% over the same time. Looking at the top two assets’ price action, it could be said that BTC and ETH could accelerate their losses over the quarter.
Historical price data shows that in the previous bear markets of 2011, 2014, and 2018, BTC dropped by 68%, 40%, and 2.8% in the third quarter of the year. This data reflects that the third quarter hasn’t always been pleasant for bitcoin and thus the larger market.
In the future, bitcoin and ether’s price performance and recovery would be dependent on macroeconomic conditions and strong hands in the market that could push the price towards recovery.
This article was originally posted on FX Empire
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