Uphold, a crypto trading platform that is registered with the UK Financial Conduct Authority (FCA), is calling a bottom in the crypto markets.
Since the beginning of 2022, digital assets have tumbled in value. At one point in 2021, crypto hovered around $3 trillion in aggregate value. Today, crypto is around $880 billion in total value, Bitcoin is trading under $20,000 and Ethereum around $1000. The losses have been spectacular, causing fears of crypto contagion and compelling some firms to halt trading.
Crypto market analyst Dr. Martin Hiesboeck, Head of Blockchain and Crypto Research at Uphold, believes the bottom is near providing a more optimistic comment – even while others believe there is more pain on the way.
“Key indicators show that Bitcoin may well be nearing a bottom. It wobbled aimlessly and on little volume around the 19k mark this week, and while some indicators point to a level around 12k-15k as the approaching end of the bear phase, a quick capitulation may be followed by either prolonged or a spectacular rebound. The put/call ratio for $ETH sank to 0.3 by June 25; such a low ratio of puts to calls usually implies that a bottom is near.”
“Bitcoin miners have sold their monthly BTC production from April to June. Logically, revenues fell 26% in June after the Luna collapse. While this was concerning at first, it seems to have helped to balance the miners’ books for the time being and remove the need for further fire sales. By some metrics, we have already seen maximum stress on miners.”
“Around 400k BTC has been moved off of exchanges into cold wallets, meaning that there is not enough BTC left on exchanges that can be readily dumped to cause a catastrophic decline. Even retail users kept buying.”
While crypto has collapsed in value, traditional markets have tanked as well. At some point, both markets will regain their sea legs – but as we all know – it is tough to call any bottom or, perhaps, “catch a falling knife” in the process.