Bitcoin price dips as major financial meltdown afflicts global equities sector
Bitcoin dips as the equities market sees $2.9 trillion of its total cap wiped out over the past week.
- Amidst rising geo-political tensions, economists continue to raise their inflation projections for 2022.
- Some analysts are predicting a major global economic collapse — much like the one witnessed back in the 1920s — within the next 90 days.
- Despite the bearish momentum, Bitcoin’s monthly profit/loss ratio still stands at a decent +3.6%.
After having scaled up to a price point of $44,000 a little over 72 hours ago, Bitcoin (BTC) continues to exhibit growing levels of volatility. It dipped by -2.3% since March 6 and by over -12% during the last three-day stretch. At press time, BTC is trading at $39,298.
The slide comes amidst a global economic meltdown where the global equities market took a major hit. Analysts noted that the sector has lost a whopping $2.9 trillion in value since the start of the month, with the ongoing Ukraine-Russian war potentially triggering more “stagflationary shock” in the near term. Independent analyst Holger Zschaepitz pointed out:
“Economists [have] cut their growth forecasts and raised inflation projections. Global stock markets are now worth $110 trillion, equal to 130% of global GDP, which looks expensive for the current situation.”
If more such corrections are witnessed within the next few days, experts believe that the cryptocurrency market may face increasing volatility and uncertainty. Popular pseudonymous cryptocurrency trader Pentoshi opined that there is a chance that a global economic meltdown may be on the cards, akin to the Great Depression of the late 1920s — if things continue the way they are at the moment.
Could Bitcoin turn the tide around?
Contrary to the bearish outlook shared by many pundits, a few popular analysts still believe that the current environment may be favorable for Bitcoin and Ether in the near term. A report released by Bloomberg Intelligence late last week reads as follows:
“Most assets are subject to the ebbing tide in 2022, on the inevitable reversion of the highest inflation in four decades, but this year may mark another milestone for Bitcoin.”
The study further noted that if risk-based assets don’t dip in value, to help ease out some of the existing price pressure, inflation measures will most likely “remain buoyant.” As a result, central banks may raise interest rates with even more gusto over the next few months.
Lastly, founders of on-chain analytics firm Glassnode Yann Allemann and Jan Happel believe that Bitcoin is currently at a “critical juncture” in its annual cycle. They claim that if the flagship cryptocurrency cannot move up to the $43,000-$45,000 range soon, it may dip as low as $34,000.
Interested in cryptocurrency? Learn more about the basics with our beginner’s guide to Bitcoin, dive deeper by learning about Ethereum and see what blockchain can do with our simple guide to DeFi.
Disclosure: The author owns a range of cryptocurrencies at the time of writing