Bitcoin (BTC) has been in a sustained bear run since January, having dropped, from a high of $20,000 to its current lows of under $8000. In that period, we have seen minor rallies, that have got everyone reeled up that we are headed back to the moon. Unfortunately, each of these rallies are short-lived and after they end, people are left dejected. Of course, all manner of reasons are constantly brought up, on why bitcoin and crypto in general is dropping.
The MtGox trustee has become the biggest scapegoat for each of these drops. However, one reason that not many people bring up, is the fact that we are in a prolonged bear-run, and interest in crypto among the masses has been quite low for the last 4 months. Anyway, reasons for the downturn aside, when will the bear run come to an end?
While no one can tell for sure the time when Bitcoin (BTC) and crypto in general will rebound, there are a few pointers that indicate a possible ending to this bear-run. The first one may sound counterintuitive, but it’s a good measure of possible market direction, and that’s the sentiment of the average investor. If you go through YouTube videos, and other crypto forums, you will realize that there is an increasing negative sentiment against bitcoin and crypto in general. People no longer have the enthusiasm they had in bitcoins a few months ago. That’s an indicator that the average investor is feeling the heat, having been boxed into unfamiliar territory by the markets.
In essence, we are at a point where many people have sold, and most of those who have not sold are mostly long-term HODLERs. Therefore, the selloffs are at a point where they can no longer sustain. In short, sellers in the market are in decline. Going forward we are likely to see a consolidation phase, as value/smart buyers take hold of the market. This is the point where the much hyped “institutional investors” are likely to start getting in. As the market starts to rise slowly due to this buying activity, average investors will come back in, and the market will set new highs again.
The second reason why we might be approaching the end of the bear run is that the increased levels of adoption of bitcoin, even as the price continues to dip. That’s an indicator that even as the price sits in unfamiliar territory, corporations do believe in the technology. As adoption continues to increase, it will offer a fundamental support not just for bitcoin, but for other cryptos that have a growing adoption rate as well. It will also give more confidence to HODLERs, as well as new investors cautiously coming into Bitcoin (BTC). This combination of long-term holders and new value based investors will push-up value slowly, before the masses jump in later at higher prices and drive it even higher.