It should be noted that Bitcoin showed unexpected strength last night. During the day, the cryptocurrency found a bottom in the $34322 zone, but a few hours later, BTC rose to a local high of $39843. The main coin then tentatively consolidated at this level.

15-minute chart of Bitcoin exchange rate

Why cryptocurrencies are falling

According to Decrypt’s sources, crypto investors have around 4.7 million BTC in their hands, which right now they can only sell themselves at a loss. At the same time, the unfavorable situation for the market is caused by several negative factors – the US Federal Reserve’s base rate hike, the war in Ukraine and protests in Canada. Incidentally, the latter led to massive blocking of bank accounts and cryptocurrency wallets, and once again reminded of the benefits of digital assets.

Bitcoin price

Given Bitcoin’s prolonged downtrend, analysts at Glassnode don’t see any scope for the cryptocurrency’s price to rise anytime soon. Here’s their quote with which they share their view of the situation.

The longer investors are at a loss in their positions and the faster those losses grow, the more likely it is that the coins they hold will be sold.

The number of cryptocurrency wallets that can sell BTCs to the upside

Right now, more than 25 per cent of cryptocurrency wallets on the Bitcoin network are at a loss. Glassnode’s logic here is simple: the longer an investor holds a losing position, which brings him more minus to the deposit each day, the faster he will sell it. This puts even more pressure on the market, provoking sellers to more actively get rid of their digital assets, experts say.

In addition, the number of active Bitcoin addresses has also decreased. Back in January last year, it was hovering around 350,000 units, but this week the figure dropped to 275,000 units. Weak activity is interpreted as a bear market signal, although the number of BTC holders continues to grow in the long term.

Dynamics of the number of active cryptocurrency wallets

Still, coins have been withdrawn from at least 219,000 addresses in the last 30 days. This could mark the beginning of a “period of net outflow of users from the Bitcoin network”. Something similar could already be seen in May 2021, when the crypto market plummeted due to news about the ban on BTC mining in China and criticism of Ilon Musk at the same time.

Overall, experts acknowledge that the bulls “don’t have much” leverage left in the market, and many fundamental factors are working against them. However, there is positive news. For example, from the point of view of supply/demand ratio, everything looks good. Long-term investors are holding on to crypto against all odds. Experts continue.

Everything looks like the beginning of a bearish trend. But keep in mind that in the long term, bears “create” bulls who then push the market up.

Much more positive remarks were published by analysts at banking giant JPMorgan. According to them, the conflict between Ukraine and Russia will not last long, with markets already approaching “peak inflation”. Therefore, the bank urges not to be influenced by bearish forecasts regarding the potential continuation of the stock decline.

Here’s what JPMorgan analyst Mislav Matejka said on the matter.

We think we should pay attention to widespread calls for less stimulus for the economy and also remain optimistic about investments by banks, mining, energy, insurance, automotive, tourism and telecommunication industries.

S&P 500 Index

Matejka also does not see the geopolitical conflict in Ukraine as something long-term and catastrophic for the global economy.

We do not expect the geopolitical crisis to last, and we see a dramatic change in the environment as early as early spring on the back of the US Federal Reserve’s key rate hike.

The analyst concluded his remarks by recommending that investors should invest more in European equities than in US equities. They should also look more closely at “cyclical” industries, which are the fastest to recover from the COVID-19 pandemic.


We believe it is difficult to predict a sharp market reversal in such an environment: After all, the world is a very unpredictable place and one has to be cautious when making such predictions. In any case, we would like to believe that the situation will return to normal and the bullish markets will follow suit.