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The recent decline in Bitcoin’s price is attributed to negative investor sentiment and economic pressures, according to Thomas Strobel, a strategist at the Italian banking group UniCredit.
Strobel estimates the fair value of Bitcoin to be around $75,000. The UniCredit analyst believes that a price drop of approximately 35% from this level, particularly if prices remain below $50,000 for an extended period, could indicate a deeper bearish trend in the market. For Bitcoin to rise to its fair value, an improvement in overall investor sentiment, an increase in inflows to Bitcoin exchange-traded funds (ETFs), and enhanced market liquidity are necessary, according to the banking expert.
According to SoSoValue, Bitcoin funds have recorded losses for five consecutive weeks. Last week, these funds lost about $315.9 million. The largest loss occurred in the week ending January 30, when Bitcoin ETFs experienced a net outflow of approximately $1.49 billion.
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Amid the ongoing downturn in the crypto market, investors are increasingly looking beyond the three largest cryptocurrencies, stated Johann Kerbrat, head of the cryptocurrency division at investment firm Robinhood, in an interview with Cointelegraph. Kerbrat noted that platform clients view the situation as an opportunity to “buy the dip.” Many, he claims, have begun to participate more frequently in the staking of digital coins.
On Sunday, February 22, Bitcoin was trading around $68,168. Over the week, the leading cryptocurrency lost just over 1%, nearly 24% over the month, and 42% over the past six months. On February 6, Bitcoin fell to its 16-month low of $60,008. The Crypto Fear & Greed Index has remained in the “extreme fear” zone since early February.
Previously, economist and investment advisor Timothy Peterson from Cane Island suggested that a turnaround for Bitcoin would only begin in the second half of December.
