As soon as the US Federal Reserve announced their decision to increase interest rate, Bitcoin experienced a recovery from an 18-month slump.
Alas, it was a brief respite as the world’s largest cryptocurrency dropped further below the $20,000 mark. The crypto market is marred by the rising fear of recession. Senior market analysis at Oanda Edward Moya commented that the ongoing chain of bad news has made many traders wary of dabbling with risky assets.
Besides the collapse of the Terra blockchain and the crypto lender Celsius Network’s decision to freeze withdrawals, crypto hedge fund Three Arrows Capital suffered major losses and was considering asset sales or a bailout. Researcher Glassnode stated that even long-term holders who were adamant about selling are currently feeling the pressure.
However, Bloomberg Intelligence analyst Mike McGlone said that historical data signals a possible key support for Bitcoin at around $20,000. Much like how the cryptocurrency found support at about $5,000 in 2018 and $300 in 2014. “Declining volatility and rising prices are earmarks of the maturing digital store-of-value,” commented McGlone.