Bitcoin’s (BTC) string of losses in the past month have put the token on course for its worst weekly run on record.
BTC is now set for its sixth straight week of losses- its worst weekly run yet. A confirmation of this pattern is likely to herald more losses for the world’s largest cryptocurrency.
BTC marked one of its sharpest falls in 2022 this week, as investors feared a drying up of liquidity from rising interest rates and slowing economic growth. The token is down 7.4% in the past seven days, and is trading near 2022 lows, at $35,000.
What do six weeks of losses mean for BTC?
BTC has capitulated sharply from highs hit in March. The token is down 33% from a 2022 high of $47,938.
The confirmation of a six-week losing streak is likely to send an extremely bearish signal to traders, and reduce positioning for a recovery. This could lead to even deeper losses for BTC.
Analysts are now calling a bottom of as low as $28,000- the average realized price for the token. A breach of this level would put most long-term BTC holders in a loss, likely inviting even further selldowns.
Veteran trader Peter Brandt sees the token bottoming out by $32,000– its lowest level since July 2021.
Why are crypto markets in a tailspin?
BTC has hardly been alone in its losses. Total crypto market capitalization has sunk by nearly $400 billion in the past month. Several major altcoins have also logged sharp losses in the past 30 days, with Terra (LUNA) and Avalanche (AVAX) among the worst performers.
Weakness in the crypto market is largely tied to equities, given that both markets enjoyed a rally on easy monetary policy over the past two years.
But this trend is coming to an end with a slew of interest rate hikes across the globe. The Russia-Ukraine war has also caused economic shocks that is keeping investors clear of risk-driven assets.