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Bitcoin’s (BTC) June performance was the worst since 2011

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Nonhlanhla P Dube

In terms of Bitcoin and larger market correction, the month of June 2022 was severe. Bitcoin (BTC), the world’s largest cryptocurrency, fell by more than 37% in one month, achieving its worst monthly performance since 2011.

Since then, Bitcoin has been settling around the R329K mark. It has also been one of the worst quarterly performances for Bitcoin, with the currency losing more than 60% of its value in Q2 2022.

According to Glassnode, an on-chain data provider, as U.S. inflation estimates remain elevated and clouds of possible recession loom, the market remains heavily risk-off. It has also been reflected in the on-chain performance and network activity of Bitcoin. Furthermore, as CoinGape has highlighted, institutional traders have been actively shorting Bitcoin.

The Bitcoin price drop has been eerily similar to past bear market bottoms in 2018 and 2020. However, there is now little impetus for a Bitcoin price turnaround. Glassnode analysts wrote:

“The case for bitcoin’s bottom formation is one grounded in observable dominance of strong-hand investors, historically significant lows in numerous macro oscillators and a strong confluence with prices hovering within striking distance of several bear-market pricing models. However, can these HODLers hold the line? “

On-chain data reveals a high level of conviction accumulation.

According to Glassnode’s study, despite the price drop, there is still a strong belief in accumulation and self-custody. Exchange balances have been emptying at hitherto unheard-of rates. On the other hand, Bitcoin “shrimp and whale balances” are rapidly climbing. However,  on-chain activity shows that network activity and user count are approaching the bear market area. According to Glassnode:
Address activity, for example, has declined by 13% from over 1M/day in November to just 870k/day today. This suggests little growth in new users and even a struggle to retain existing ones.

At this point, predicting the Bitcoin bottom would be tough. If global macroeconomic conditions worsen, some market analysts predict that the Bitcoin price would fall to R246.7K or even lower.

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Nonhlanhla P Dube

Nonhlanhla P Dube is a senior news reporter at Rateweb. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her directly by email at nonhlanhla@rateweb.co.za

Published by
Nonhlanhla P Dube
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