The world's biggest cryptocurrency was trading at $42,035 at the time of writing on Tuesday — with one analyst telling Bloomberg that BTC has had a "pretty shocking start to 2022."
Bitcoin briefly dipped below $40,000 on Monday, but bounced back and avoided a prolonged stint below this psychologically significant level.
The world's biggest cryptocurrency was trading at $42,035 at the time of writing on Tuesday — with one analyst telling Bloomberg that BTC has had a "pretty shocking start to 2022."
Worse still, the news outlet went on to note that the first 10 days of January marked the biggest decline at the start of the year since 2012.
Sentiment has evolved dramatically in recent months. Back in November, analysts were brimming with confidence that BTC was on the cusp of breaking $100,000 for the very first time.
But now, research from JPMorgan reveals that just 5% of clients believe this fabled milestone can be reached by the end of this year — with 9% anticipating BTC will be over $80,000.
Although this statistic is undoubtedly bearish to say the least, there does appear to be some optimism. Some 41% think a single Bitcoin will be worth more than $60,000 in 12 months' time — indicating that the current downturn will be temporary to say the least.
Of course, those with long memories will argue that BTC tends to deliver its most explosive price gains when people least expect it. And with the Crypto Fear & Greed Index currently flashing a score of Extreme Fear, now would be an opportune time to do it.
All of this comes as Bitcoin shows an exceedingly close correlation with the tech-heavy Nasdaq, which briefly entered correction territory on Monday after falling by more than 10% from an all-time high set in November.
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What's Next?
The Fed turning off the money taps is shaping up to be a significant headwind for Bitcoin in the coming months, not least because interest rates are set to increase.
But a number of bullish analysts believe that, while BTC may fall at first, it is better positioned to bounce back than stocks, which have failed to suffer a meaningful correction since March 2020.
ARK Invest's Cathie Wood, a renowned Bitcoin enthusiast, believes that the "strike against technology, growth and innovation" is going to be a temporary one — and BTC still has the potential to surge to $500,000 in the coming years as institutions begin to gain exposure.
