Bitcoin (BTC) is lower by more than 37% this year, again falling below $30,000. However, one researcher sees the potential for even more downside.
Josh Olszewicz, head of research at investment manager Valkyrie, says volatility will need to settle down in order for bitcoin’s price to establish a foothold at the bottom anytime in the near term.
“We can look at things like the 200-week moving average, which is around $22,000. We can look at realized price, which is the average price of coins that have moved on-chain, which is around $23,800,” Olszewicz said on CoinDesk TV’s “First Mover” program. “This [movement to hit bottom] will probably take at least all of Q3, perhaps Q4 as well, if it were to happen this year.”
Olszewicz said other factors, such as the U.S. Federal Reserve raising interest rates, are also playing a role in bitcoin’s market performance.
He postulated that institutional investors could be leading the downturn. Olszewicz cited the average size of on-chain movements being in the tens of thousands of BTC.
“A majority of volume is certainly led by institutional-size flows,” he said.
Nonetheless, Olszewicz said market movement continues to depend more on retail traders than institutional investors. He sees those who are learning about cryptocurrencies now diving in during this bear market to test the waters and to “see if they can survive.”
“We’ve seen this rise and swell before, and as individuals again learn about bitcoin for the first time, the cycle could repeat,” Olszewicz said. “Since 2018, the average number of bitcoin-holding wallets has increased from over 27 million to more than 41 million today.”
He added, “We’re seeing a lot of people not only staying here, but getting excited again about what’s going on in the space.”
