Bitcoin, which boasted a 55.7% gain year-to-date, has since retreated by 11.4% over the past 30 days. Despite Grayscale’s court victory against the SEC, the positive momentum seems to have faded. Some experts are drawing parallels between the current state of the BTC market and the bull market of 2015-2017.
Liquidity is dwindling, and investor sentiment surrounding bitcoin has turned more cautious. In early 2023, bulls were blindsided by a precipitous drop on August 17, resulting in the liquidation of over $213.5 million in long positions. This proved to be the steepest one-day decline since the Terra Luna collapse in May 2022.
Due to a decline in consistent liquidity and trading volume, the Fear & Greed Index — a critical measure of investor sentiment — has shifted from neutral to fear in the recent month.
Notwithstanding the short-term volatility, institutional investors remain bullish for the long haul. As of now, nine of the world’s premier investment firms are seeking approval to launch bitcoin exchange-traded funds (ETFs). However, the SEC’s ongoing hesitation to greenlight these proposals could dampen investor spirits and usher in another wave of cryptocurrency volatility.
