As is traditional, let’s start with an explanation. Bitcoin set a new local low of $29,730 today. This is the cryptocurrency’s lowest result in 2022. As of today, BTC is more than 54 percent behind its all-time high.

Bitcoin exchange rate chart

In general, the cryptocurrency market is collapsing along with traditional finance, i.e. equities. However, there were plenty of reasons for the collapse within the blockchain community as well. For example, the volume of BTC inflows to cryptocurrency exchanges from personal wallets accounts for 40 percent of the total. At the same time, this figure is usually around 10 percent. Consequently, the market is now under pressure from coin holders themselves, who are willing to get rid of the coins at a loss due to panic among other things.

Bitcoins flowing from personal wallets to exchanges

The creators of Terra’s UST algorithmic stabelcoin deserve a special mention. Ideally, the UST rate should be $1, and it should be maintained by the market participants themselves. However, the day before the so-called detachment of the token from the necessary value, as a result of which the UST rate went down.

UST Stablecoin exchange rate chart

At the bottom the rate reached 64 cents – again, instead of $1. With that in mind, Terra representatives have taken to conducting transactions with their bitcoins, which were bought to secure the stackablecoin. Analysts believe they took to lending BTC to exchanges, while others speculate that bitcoins were sold to buy UST and stabilize the cryptocurrency. Be that as it may, 42,530 bitcoins worth $1.34 billion were withdrawn from the company’s wallet – and that certainly didn’t have a positive effect on investor sentiment.

Withdrawal of bitcoins from Luna Foundation Guard wallet

Eventually, the Stablecoin exchange rate began to level off, but user confidence was shaken. In addition, the UST project itself against the backdrop of Luna Foundation’s decisions definitely proved to be centralized.

Today at lunchtime, the market situation at the end of the day looks like this.

Cryptocurrency market situation

Bitcoin’s fall continues

Analysts at the Glassnode platform noted several bad indicators for investors of the major cryptocurrency. The first one is the average volume of coin inflows to centralised exchanges, which reached a three-month high in the last 7 days. This figure is now hovering around 1755 BTC.

Dynamics of coin inflows to exchanges

Typically, large inflows of coins to exchanges indicate that the whales are getting rid of the cryptocurrency en masse, preparing for a continued fall in its price. According to Cointelegraph's sources, the logic here is simple - traders are depositing BTC on trading platforms and immediately selling them.

Panic among investors has also peaked. This is evidenced by the Fear and Greed Index, developed by the Alternative platform. Recall, it is based on volatility, trading dynamics, social media posts, Bitcoin dominance index and trends. The index now speaks of “extreme fear” among traders. That said, moderate panic in the crypto market persisted for at least a month until this week.

Fear and Greed Index by Alternative

Despite the bad sentiment, the number of BTC transactions per day has not yet fallen. According to YCharts, there were 233,892 daily transactions worth around $30 billion on Sunday, matching the average since January 2022.

On the scale of the 4-hour chart, Bitcoin’s value collapsed earlier in the week to the lows of June last year, with the $30,000 level serving as important psychological support for traders so far. But will Bitcoin be able to bounce back from it and start a new wave of growth? Or will the collapse continue?

Bitcoin chart

Opinions of different analysts and just famous personalities in the cryptospace are divided on this matter. For example, analyst Michael Van De Poppe posted the following chart on his Twitter and said that Bitcoin may well drop to $30,000. As we can see, his prediction has become a reality. After such a sharp drop, he recommends buying back BTC, which so far also coincides with what is happening.

Main support levels on the analyst’s chart

Another crypto-enthusiast, Dylan Lecler, is more pessimistic about Bitcoin’s short-term prospects. He stated that the coin could well go down to $24,300 – which is the level where the main cryptocurrency’s “realised price” is. Here’s a quote from the expert, in which he shares his view of what’s happening.

Bitcoin’s fall to the realised price is quite possible, this line has been the bottom for the cryptocurrency in previous bearish cycles. The realised price is currently around $24,300.

As a reminder, the realised price of Bitcoin is the value of all coins at the price at which they were bought, divided by the number of BTC in circulation.

Leclerc also noted that a decline down to the realised price line would not have been possible without a variety of negative factors in traditional markets. Unfortunately, that’s exactly what it is right now – the effects of the COVID-19 pandemic on the global economy, the US Federal Reserve’s policy of raising the benchmark lending rate, and the geopolitical instability around Ukraine.


We would like to emphasize that these predictions are not necessarily coming true, as it is simply impossible to predict what will happen in such a volatile market in such a challenging environment. Therefore we recommend to make trades and investments according to your own analysis only, thus being responsible for your actions.


The fall of Bitcoin


We believe that the digital asset sector has indeed experienced another major upheaval. What will happen next is unknown, and especially because of the complex circumstances in the world. However, in any case, it is important to understand that Bitcoin will not stop working even if it falls further. And decentralised finance, NFT tokens, stabelcoins and other parts of the crypto world will continue to exist and evolve as well. So even if the bearish trend is already with us, the coin niche will only get better going forward.


And what is your prediction for Bitcoin? Share it in our millionaires cryptochat. We discuss other interesting news there as well.

SUBSCRIBE TO OUR CHANNEL ON TELEGRAM. THERE’S EVEN MORE INTERESTING NEWS HERE.