It isn’t all doom and gloom in the cryptocurrency industry as it recovers from the repercussions of a difficult week. For the first time in Bitcoin’s history, the price has dropped for nine weeks in a row. In the middle of the upheaval, investors are wondering if the crypto is oversold.
since the beginning of the year, Bitcoin and Ethereum, along with the rest of the crypto market, have been smashed. Indeed, it has been so awful that Bitcoin has set a new record for continuous price drops, with nine weeks of lower prices in a row.
Cathie Wood Sheds Light on Bitcoin and Current Market Sentiment
Cathie Wood, the founder, and CIO of Ark Investment Management, recently appeared in an interview discussing Bitcoin and the current state of the market. Cathie has been a vocal supporter of both Bitcoin and Ethereum. In the course of the discussion, she highlights how ARK Invest analysts are monitoring the current bear market and whether or not investors should be concerned.
“I’d like to talk about Bitcoin, as I indicated,” Wood added, “where we’re introducing the Bitcoin monthly, and I’m quite enthusiastic about it because we believe the market needs this.”
Bitcoin futures are currently selling at a discount to spot Bitcoin, according to the founder of Ark Invest.
Terra/Luna – The Biggest Crypto Fiasco
Everyone knows that Terra, the blockchain terra, blew up in the last month and that Luna is now worthless. At one point, the ecosystem’s total market capitalization was approximately $60 billion, and it had a number of well-known proponents. When Terra’s UST, one of the largest algorithmic stablecoins, lost its peg, the market erupted, wiping off nearly 2.7 percent of crypto’s total market cap.
According to Cathie everything in the space was formerly unorganized, which is why the horrible catastrophe occurred.
“While the systemic repercussions of Terra’s failure should not be overlooked, its influence on Bitcoin appears to have been limited.”
Wood also expects more stringent cryptocurrency laws as a result of the Terra LUNA/USD fiasco.
Bitcoin’s Longest-Ever Red Streak Ends
Apart from Terra Collapse, another reason for Bitcoin’s bearish trend might be due to the high correlation with the Nasdaq. However, in the last week, that correlation broke down a bit.
The Nasdaq had a few really good days, but Bitcoin did not. It’s a matter of worry for investors as Bitcoin is down 57% since it’s high at almost $70,000 in November. Its 200-week moving average is $22K and is rising. It seems that after a long period of consolidation and corrections, Bitcoin is on the verge of breaking in a bullish direction.
Short Term Holders Appear to Have Capitulated
Wood stated in the interview that it appears that short-term investors can see everything in this ecosystem; the openness is incredible.
“Based on the metrics, those short-term holders have capitulated. That’s fantastic news for putting in a bottom. At 65.7 percent, long-term investors are at an all-time high. That suggests they’ve had Bitcoin in their possession for at least a year. That is, we have some extremely powerful holders or holders here. Although to identify the bottom, you might see some long-term holder capitulation.”
With just under 66 percent of the entire Bitcoin supply not moving in over a year, Bitcoin holders have never been more long-term focused. Cathie Wood, claims that holders have given up and that if we haven’t put in the bottom yet, we’re close. Previously, Cathie was one of the few persons who correctly predicted the bottom of the July stock market fall last year.
Is she correct Now? We’ll have to wait and see if the Ark Invest releases any interesting on-chain data.