Bitcoin price witnessed its worst January since its establishment

Bitcoin price is closing out a rough month after losing more than 50% from its all-time high levels. The month ends with the latest declines putting the flagship cryptocurrency on pace for its worst start to a year since the dawn of 2018 “crypto winter. This month, BTC notched only 11 up days, making its spent 65% of the month mired in a plunge. Notably, following the impact of the leading crypto coin, other assets have also suffered from ETH, the second most popular cryptocurrency losing a rough 30% since the end of the past year.

Why has Bitcoin price lost its momentum?

Bitcoin price plunged to near $33k this month from its record high of near $69k. The asset faced a broader sell-off on a growing conviction. Notably, many are concerned that the US FED will soon raise rates as it ratches back its ultra-accommodative policy settings.

– Advertisement –

Such crash of the leading cryptocurrency has hit all corners of the market, from significant assets to meme coins to publicly-listed cryptocurrency exchanges and miners. Notably, cryptocurrency is a very volatile asset class, and everyone should be aware of such volatility.

According to Troy Gayeski, strategists at FS INvestment, the crypto market sees its much trickier environment than where it was “green-light go”. Now it is “yellow-light caution”.

Macro sentiments are leading narratives

The decline in Bitcoin price has also translated to ower volume. According to analysts, following a string of hot inflation prints, it is observed that Macron sentiments around risk assets have been the leading narrative in the markets with expectations of essential tapering of quantitative easing.

Besides, cryptocurrency investment products have seen outflows for the first time since August, with weekly outflows averaging $88 million this month. Moreover, total assets under management for BTC related products have also declined by more than 23% since the last month.

According to experts in the cryptosphere, the latest declines puts Bitcoin at the low end of the range of significant drawdowns. It is worth noting that over the period of the last decade, there have been five significant pullbacks for the coin off then ATHs with an average peak-to-trough decline of 77%.

Investors making painful swift slump

The latest Bitcoin price may not be as rattling to cryptocurrency veterans who are accustomed to the coin’s volatility. However, several investors have only gotten in relatively, making the swift slump painful.

According to Gayeski, if investors are comfortable waking up to a 30%, 40%, and 50% plunge for whatever reason, then only they should enter the market. Meanwhile, the sell-off in BTC has been muted going into this week. The outlook for the crypto market as a whole remains negative, with heavy losses seen across a range of popular altcoins.

Bitcoin price is closing out a rough month after losing more than 50% from its all-time high levels. The month ends with the latest declines putting the flagship cryptocurrency on pace for its worst start to a year since the dawn of 2018 “crypto winter. This month, BTC notched only 11 up days, making its spent 65% of the month mired in a plunge. Notably, following the impact of the leading crypto coin, other assets have also suffered from ETH, the second most popular cryptocurrency losing a rough 30% since the end of the past year.