Bitcoin’s worst-ever performance period: is a bottom in sight?

Bitcoin’s Bearish Run Is The Longest In The Network’s History, According To Glassnode Data shows,

According to the tracker, the winter started on November 10, 2021, after the price peaked above $69,000. As of July 18, 2023, BTC is trading around the $30,000 level, down about 55% from its all-time high.

However, despite the crash and the persistence of the downturn, recent developments suggest that there may be a downside.

Bitcoin Bear Escaped?

Trackers show that this is the second biggest phase when coin prices have remained in the water for this extended period of time. Between 2015 and 2016, which was still the initial phase of the coin when its liquidity was increasing, the coin remained depressed for 386 days.

BTC investors were also under pressure between 2018 and 2019, when prices fell significantly from their 2017 peak, falling to $4,000 in the depths of 2018’s crypto winter.

The extended recession through 2021 has been influenced by several fundamental factors, including intervention by the US Federal Reserve, with the central bank taking measures to control inflation by raising interest rates for eight consecutive sessions.

There have been fear factors related to the collapse of major crypto firms including 3AC, FTX, Voyager and the spectacular decline and crash of UST and Luna. Following the collapse of FTX in November, bitcoin price dropped to $15,800 before expanding to nearly double in the first half of 2023.

Hash Rate and the BlackRock ETF Application

The network’s hash rate is running at near-all-time highs, despite relatively low bitcoin prices and the ongoing bearish phase. Bitcoin hash rate as of July 18 stood at over 385 Eh/s, well behind the all-time high of 465 Eh/s recorded at the end of June 2021.

Historically, prices and hash rates are directly correlated, but falling coin prices haven’t stopped miners from buying new gear and plugging into the network, fortifying it against attacks.

Hash rate measures the processing power associated with a proof-of-work network such as bitcoin. The higher it is, the more secure the blockchain is against potential attackers.

report on 16 july were told BlackRock’s application for a spot bitcoin exchange-traded fund (ETF) was approved by the United States Securities and Exchange Commission (SEC). This is a significant milestone for the bitcoin-related proposal and could strengthen prices if regulators eventually approve the derivatives, allowing institutions to take exposures.

At the moment, bitcoin is hovering around $30,000 and is looking weak. Bulls have been unable to close above $32,000 despite BlackRock reintroducing the Spot Bitcoin ETF.

BlackRock is the world’s largest asset manager with over $9.4 trillion in assets. The company applied for its first spot bitcoin ETF in June, only for the changes to be made and the application to be updated before being resubmitted.

It remains to be seen whether the ETF approval signals a bottom for bitcoin and the emerging asset class.

Feature image from Canva, chart from TradingView