According to Reuters, the crypto winter is likely to be replaced by a bitcoin 'bloodbath'. Analysts are now making gloomy predictions about BTC prospects.
Currently, crypto investors are dealing with lots of challenges, economists at Bitfinex pointed out. They note that the situation is even worse than the crypto winter. The volume of bitcoins on crypto exchanges has sharply decreased, amounting to $2.3 million. In 2020, that indicator reached a record high of $3.1 million.
In 2022, bitcoin plunged by 63% with its market capitalization dropping by $1.63 trillion. A devastating blow to the industry was delivered by the collapse of FTX, the largest crypto exchange. Against this background, many investors had to completely revise their trading strategies on cryptocurrencies.
Major offloading took place in November. Back then, the market experienced a 7-day realized loss of $10.16 billion in bitcoin investments as speculators were forced to exit long-term positions. Many analysts called this a bitcoin 'bloodbath' driven by the FTX crisis. The collapse of this crypto exchange caused a domino effect, pulling many other crypto companies down with it.
Crypto trading is getting more taxing and risky every day. Savvy investors and large hedge funds enter the market, trying to take a bigger advantage. Hence, it considerably complicates crypto trading, analysts stated.
Earlier, there was a well-established mechanism: the largest BTC holders sold coins and retail traders bought them. However, now the market balance may be tipped. In addition, regulators have become extremely watchful. They are strongly committed to taking the crypto market under strict control.
A study from the Bank of International Settlements (BIS), conducted between 2015 and 2022, showed that almost 81% of traders lost money on their crypto investments.
