Bitcoin is close to being in bear territory after falling nearly 20% from all-time-high.

Even seasoned bitcoin bulls appear to be unnerved by the crypto’s dramatic plunge from its all-time-high above $69,000 to a low of $55,666 today. Though bitcoin is known for its roller-coaster like moves and intense volatiliy, its near-20% plunge in a matter of days had crypto-naysayers calling a bear market, and forecasting a bitcoin ‘winter.’

Here are some perspectives:

• Bitcoin is approaching bear market territory as the world’s largest cryptocurrency plunged almost 20 percent in less than two weeks, and its price has closed in the red for six consecutive days.
• Investors are afraid that creditors of collapsed crypto exchange Mt Gox might flood the bitcoin market by liquidating a chunk of their payments. “Those affected will receive a large sum of bitcoin, likely happening in Q1 or Q2 of 2022. This has brought some fear into the market on a longer term horizon,” Matthew Dibb, chief operating officer at Singapore-based crypto asset manager Stack Funds, told Reuters.
• The early drop was predominantly driven by traders taking short positions in the perpetual futures market, according to Ki-Young Ju, CEO of blockchain analytics platform CryptoQuant. “The market sentiment was sell, according to the taker buy-sell ratio,” Ju said. “More people were shorting bitcoin via market orders.”
• Cryptocurrencies like Bitcoin and Ether seem to have suffered as the mood in global markets has been cautious over recent days amid concerns about economic growth, interest rates and inflation, according to Reuters.
• “During the 2016/17 Bitcoin winter, the thing that really took the wind out of the sails of crypto was when interest rates rose and liquidity was draining from the system,” said Jamie Cox, a financial adviser and managing partner at Harris Financial Group.
• “Overall bitcoin sentiment, as measured by the Crypto Fear & Greed Index, has now changed – At the time of writing, the Index measured just 34/100 — characterizing “fear” — having dived a full 20 points overnight. The sharp fall contrasts strongly with behavior for much of the past two months, where the Index lingered in “greed” territory around the low 70s. As such, investors are now at their most fearful since the end of September, just before Bitcoin began its surge to recent all-time highs.” (Coin Telegraph)

As this is being written, bitcoin is trading at $57,738, and appears to be recovering from its low of $55,666.

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