Mercados al día is an exclusive summary of the news that moves the bitcoiner economy. It is sent in advance by email to a list of subscribers and then published every Monday in CriptoNoticias. If you want to have the information in advance,subscribe to the list here.
In the course of the first half of 2022, the downward trend in the price of bitcoin (BTC) was noticeably accentuated. At the end of the semester, last Thursday, June 30, several negative records were recorded in the price trajectory, especially the highest monthly negative performance in the history of bitcoin, as reported by CriptoNoticias, this Friday, July 1.
The depreciation of the price of bitcoin, by 40.6% in June, contributed to the fact that in the second quarter of the year there was a drop of 56.27%, the worst in more than a decade. The first half closed with a 60% loss for the bitcoin price, while the drop from the November 10 all-time high of nearly $69,000 is 71%, according to the CriptoNoticias price calculator.
Stock market also collapsed in the first quarter
These negative bitcoin records, amid the worst inflation rates in 40 years and the Fed’s interest rate hike policy, also caused the biggest semi-annual drop in the main stock market indices. The S&P 500 index registered a 21% drop from its value at the beginning of January 2022, while the Nasdaq index fell 29.4% in the same period. In the case of the S&P 500, it is the worst semi-annual decline in 54 years, one of the four worst in more than a century of history. Nasdaq registered a greater fall, since among the main technology stocks there were falls of more than 30%.
Traders Leverage in the Bear Market
With the prices of cryptocurrencies in a sharp downward trend, leveraged trading is reactivated among investors, who favor short positions. According to the latest report sent to CriptoNoticias, by the cryptocurrency exchange CoinEx, prepared in conjunction with the company TokenInsight, the trading volume of perpetual contracts has not been significantly affected by the fall in the spot market.
Featured chart of the week
Although traders and analysts warn that historical data is not a guarantee that the performance of a stock asset will follow a certain trend, some past milestones are always shown as possible indicators of the evolution of a given asset or index.
This graph shows the five worst semesters of S&P 500 performance in the index’s century and a half history, including the semester just concluded. Now, in the first half of the years 1877, 1932 (the Great Depression), 1962, and 1970, the S&P 500 fell 20% or more, but on those four occasions there was a rebound of it.
Bitcoin is highly correlated to the stock market; Will we then have a decidedly bullish second half in 2022?
Bitcoin loses $20,000 support though bounces off $18,000
The last 7 days saw the loss of psychological support at $20,000. The price of bitcoin had started the week above USD 21,000, but last Thursday the 30th it crossed the emblematic “$20K” mark in decline.
On the chart, with 4-hour candles, it can be seen how the price has remained in a narrow range at USD 19,000, after touching USD 18,000 on Thursday night.
Historically, this is not the biggest bitcoin correction
After touching USD 18,000, CriptoNoticias commented on the opinions of several traders and analysts on the possible course of the bitcoin price. Mauro Liberman, the co-founder of the CrypStation cafe, insists that as big as the price drop seems (at the time, -73% from November 2021) it is not the biggest in bitcoin history. Until last year, Liberman stresses, the price has always recovered after a major drop.
For Deutsche Bank, bitcoin will rebound 50% this year
Deutsche Bank analysts see a moderate bullish scenario for bitcoin, along with a revaluation of the S&P 500 and Nasdaq by the end of the year. Facing a drop of more than 70%, analysts at the major German bank estimate that the price of BTC will reach USD 28,000 in December.
This conclusion is based on the close correlation between bitcoin and conventional stocks and the estimation that the S&P 500 will return to the values of the beginning of the year. Although there is coupling of bitcoin and stocks, at the moment the percentages of increase or decrease in the price of BTC are higher than those of the S&P 500.
How much do financial regulators know about inflation?
A popular assertion establishes that, upon confession of the parties, relief of evidence. In the case of the current high inflation, Federal Reserve Chairman Jerome Powell, who called inflation “transient” last year, has been forced to rectify.
He even said in a forum organized by the European Central Bank the following: “We understand well how little we know about inflation”, as reported by CriptoNoticias. Powell blamed severe supply shocks for causing current inflationespecially in the energy sector.