With the recent trend of a gradual rebound in the Bitcoin price, the optimistic outlook that the sharp correction period since the beginning of the year may be over and a structural uptrend may appear is gaining strength.
However, there is an objection that the virtual currency market still has great uncertainty as other virtual currencies except for Bitcoin and the US stock market are not showing a clear recovery trend.
CNN reported on the 20th, “The rise in the bitcoin price is raising investors’ hope that the ‘virtual currency winter’ has finally come to an end.
Currently, the price of Bitcoin is trading around $23,000 on major US exchanges. It is a 65% drop from last year’s peak, but has risen more than 15% in the past week.
In one week, the Ethereum price rebounded by 45% and the Solana price by 35%, suggesting that the virtual currency winter, which means the overall weakness in the market, is coming to an end.
However, CNN analyzed that this situation could only be the basis for the rapid market volatility, which is a fundamental characteristic of virtual currency.
Citing an analysis of market research firm LMAX Group, CNN reported that “it is difficult to put too high expectations on a mid- to long-term uptrend,” saying, “It is important to keep in mind that virtual currency is still close to an emerging market.”
The LMAX group cited as the basis for this observation that the price of several other cryptocurrencies other than Bitcoin or the US stock market, which is highly correlated with Bitcoin, did not rebound to a meaningful level.
This means that it is too early to view the Bitcoin price rise as a basis for a recovery in the market as a whole, as it is simply a short-term phenomenon due to the psychological change of investors.
LMAX Group said, “The Bitcoin price should be judged to be moving similar to that of tech stocks, which are more volatile than safe assets such as gold and the dollar.
CNN analyzed that the fact that the stock prices of cryptocurrency-related companies such as Coinbase are also on the rise is contributing to raising the hopes of Bitcoin supporters.
However, there are also observations that it will take a little more time for the current bitcoin price rise to lead to the overall recovery of virtual currency and the entry of investors who have left.
LMAX Group predicted, “Other cryptocurrencies and the US stock market can achieve meaningful recovery only when the Bitcoin price rebound remains at a solid level for the time being.”