Why is market sentiment for Bitcoin (BTC) currently so poor?

Bitcoin is currently ‘languishing’ at just under $65,000. The Fear and Greed Index is Neutral, and bears are shouting from the rooftops that the price of $BTC will be rejected from the top of its bull flag once more - this time to go crashing down to much lower prices, and possibly into a bear market. Why is the sentiment for Bitcoin so poor?

A series of short duration corrections

Since careering upward out of the last bull market, the $BTC price has experienced several corrections of up to 20% or so, and with a maximum duration for each one of around a couple of months or so.

This time is different. The $BTC price has not only seen a 27.5% correction, but this has also taken a much longer time - 140 days is the current duration, more than double the amount of previous pull-backs.

So why is this still a correction rather than a series of lower highs and lower lows that will eventually plummet down to much lower levels?

With any asset, anything is possible as far as its market price goes. So yes, there is always the possibility that $BTC could actually make this drop. Nevertheless, Bitcoin is still in its bull market, and the trend is up until it’s not. That point has not been reached and therefore being out of Bitcoin is more risky than being in it.

Huge 91% gain in short time demanded longer correction

In addition, after the previous correction, which ended 23 January of this year, the $BTC price roared skywards and put on 91% in only 30 days - a huge gain in a very short amount of time for any asset.

After such a huge gain there was bound to be a much longer period of consolidation and accumulation, and it certainly looks like we are getting it. The longer the $BTC price spends consolidating, the higher the eventual target price could be after breaking out.

Global liquidity cycle curving up

These are just observations from a technical perspective. One also might want to consider that the global liquidity cycle is just starting to curve up. Certain central banks have already started to cut rates, and the Federal Reserve signalled only yesterday that a September rate cut could be likely.

Massive debts need to be rolled over

You could add to this the huge amount of debts that are piling up around the world - not least in the US, where the amount of debt recently rose above $35 trillion. In order to service these debts, another huge round of fiat currency printing will be in order - hence the beginning of a move up in that liquidity cycle.

Institutions have finally cottoned on

Finally, the major reason to be bullish on Bitcoin, is that this is the world’s hardest asset. Only 21 million BTC will ever be mined into existence - 19.5 million of that is already out there, and from 5 to 6 million have been lost - never to make their way back into circulation.

It appears that some of the big institutional players have finally realised what this asset is, and the likes of Blackrock and co., are buying $BTC hand over fist on behalf of their huge corporate clients.

Sovereigns about to follow suit

And that’s not all. What could follow is the beginning of game theory, as sovereign states start to quietly make their moves. Just as with gold, the countries that have the most are able to reserve their place at the global financial table. Once it becomes obvious that particular countries are buying, the rest will be in a rush to follow suit. 

Are you still in Bitcoin?

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.