Market Status: Investors’ fear continues to hinder Bitcoin’s growth

Bitcoin, which was trading around $20,800 on Monday, gave up some of its seven-day rally with a slight dip. The largest digital currency in the market still maintains its $20,000 support; But analysts are not very hopeful about the continuation of upward correction these days.

To Report CoinDesk, Simon Peters, a digital currency analyst at the EToro brokerage, said that the digital currency market is currently affected by many negative factors such as the decrease in the income of businesses active in this area, the growth of inflation and the increase in bank interest rates in the United States. has taken; Important factors that have affected the stock market and other assets.

It is quite clear that the digital currency market has a high correlation with indices related to the US stock market, especially indices consisting of stocks of companies active in the field of technology. Craig Erlam, the senior analyst of Oanda Group, also said that the fall in the price of Bitcoin in recent weeks reflects the negative sentiment of investors towards all risky assets.

At the moment, it seems that investors’ fears about the troubled state of the lending platform Celsius, as well as the investment company Three Arrows Capital, have subsided to some extent. Howard Greenberg, head of the Prosper Trading Academy, has pointed out that the “fear and greed” index of digital currencies has also moved slightly away from the extreme fear range.

He says:

The 200-week simple moving average (SMA 200), which is now at $22,650, is an important resistance that the price should break above and hold before we see the cryptocurrency price jump to higher levels.

Most digital currencies have experienced little volatility in the past day. Ethereum, which is now hovering just short of the $1,200 resistance, has lost about 2% of its value in the last 24 hours, and Polygon, which recorded one of the biggest jumps of the last week, overnight. The past has faced a 7% drop.

In the traditional stock market as well, the fear of stagnation has overshadowed investors’ optimism regarding last week’s surge. Research by the American Association of Independent Investors (AAII) also shows that the distribution of bearish sentiments among investors has increased by 11.4 percentage points to 58.3%, and the distribution of bullish sentiments among them has fallen to 19.4%.

The S&P 500 and Nasdaq have fallen 0.3% and 0.8% respectively in the last 24 hours. According to a new Bloomberg report, some important industrial metals such as copper and tin are also on the verge of recording their worst quarterly performance since the 2008 financial crisis, and this could be a sign of an impending recession.

Bilal Hafeez, CEO of Macro Hive, recently wrote in a newsletter:

We are now in a bear market and this bear market is likely to continue.