Topic: The Macroeconomic Situation of BTC (Read 198 times)

The specific characteristics of other cryptocurrencies and how crypto users are given different choices because of these is not a macroeconomic situation that affects Bitcoin. Altcoins have been present in the crypto market for many years already and they didn't really compete much against Bitcoin. Altcoins are actually competing each other more than they compete against Bitcoin. In fact, Bitcoin sustains them in a way. Without Bitcoin, all these altcoins are not here.

Exactly, I have witnessed this when there's a new ATH and if you compared when there's a bear market trend.
When the price reached a new ATH, a lot of people talked about Bitcoin, others blamed themselves why they didn't invest while the price is very low or while have corrections.  The reason also why Bitcoin price struggled to pump up during the bear market trend is because the FOMO continued spreading which commonly happens to new investors who are always afraid to have a loss.

There are too many factors behind this bear market not only this macroeconomics situation or we're just a bear market cycle which makes the Bitcoin price struggle to pump up, otherwise, but it's also because it's normal for Bitcoin to pump and dump because of it's nature of volatility.

Special characteristic of a crypto could be that they are volatile and also decentralized but if people believes in it, will that cause the price to crash? That sounds weird but the action of the people towards a crypto can affect their volatility. It can be that the price will go up if many people buys and hodls but the opposite thing can happen once they sell.

About the Ukraine war, I think there is only a small impact in the price of cryptos because before the war came, the dip are already starting. Third is when people follow others but this is what actually happening now. Many people are buying but out of our surprise the price can still go down sometimes. The last item in your list is probably the one that has a big contribution on the fall.

The fact that inflation is not a surprise, in my view with money printing and aid packages during the covid pandemic, leads to inflation, which has been foretold. What we did not expect was that the war between Russia and Ukraine made the world economy even more wobbly and difficult and bitcoin is not immune to that influence. With or without these factors, this year is also expected to see a drop in the price of bitcoin, this is a crypto market cycle and a lot of people have been waiting for it to happen.

I'm not sure what else you could call the trend if not a bear market. Even if the low is in and price reverses to higher levels, it'd still be a bear market and why it'd be called a relief rally, as it'd be some relief from the bear market. Until there is a significant higher low, there are currently only lower highs. Even in 2019 when price went from $3.2K to $14K, it was still a bear market as price simply created a lower high. The bear market only really ended in that cycle when price made a higher low at $3.8K in 2020. As quite obviously dropping 75% from $14K is considered pretty bearish (and continuation of the previous bear trend).

There is a link between each other, this may affect crypto in general, for example the case of Ukraine which is currently at war, people are more likely to think this will affect the journey of crypto, especially regarding bitcoin, even though these characteristics are not necessarily all true, inflation can occur for various other reasons, so the bear market itself is at the stage of an ongoing correction.

In general this does affect crypto conditions, but not as big as the news we often see, so there is no need to worry too much, especially when it comes to bitcoin.

I do not think that Bitcoin is directly affected by political factors, or at least not in the same way as what is happening in the stock market or energy, and therefore we can exclude that political factors are a direct influence on what is happening.

Panic, fear and greed are factors that do not bring about change, but follow change, meaning you will not find fear that is the reason that drives the price to decrease by 30%, but after a 10% decrease occurs, fear can make that percentage 30%.

Interest rates may be a direct influence because many miners, lending companies and others need to be linked to debt, which is affected by interest rates.

I’m not sure you can really call it a bear market right now. Sure we’re coming off a year where bitcoin was down 40% or so at this point, but over the last month bitcoin is up around 18%. I think there could be a bit of a changing of the tides, but I guess we’ll see how the stock market plays out in the next year or so, will certainly have an effect

You forgot another factor- centralized crypto exchanges and shitcoins going bankrupt- Terra, Voyager, Three arrows capital, Celsius Network.
Many people see this as a some kind of bearish signal that the cryptocurrency world is falling apart, so they just panic. This couldn't be more wrong. A bunch of centralized companies with sketchy business models offering insane returns and relying on leverage and extremely bullish predictions are facing trouble. I see this as a win. The blockchain isn't damaged at all by this and the BTC community is strong.
The war in Ukraine had lost it's influence over crypto prices. The world economy will adapt to the situation. The crypto world will adapt as well.

In my opinion this whole "bear market" started when bitcoin couldn't break $70k resistance and it started coming down. Then the dumping started and the downtrend shaped.

It could have ended there but all of a sudden we started seeing a wave of FUD and market manipulation that tried to intensify the panic sell and keep the downtrend alive.

This could have still ended but suddenly economy of most countries like US and most of Europe crashed. Obviously some people would need to sell their bitcoins to cover their losses so the downtrend continued.

The final straw was the fact that other markets (eg. US stock market) started crashing hard and over the past 2 or 3 years people are fooled into thinking that bitcoin should drop because of that, so they started panic selling hence prolonging the downtrend even more.

The other reasons you mentioned such as the war and inflation are actually reasons for bitcoin price to go up not down.

Yeah, that's how the market really works, I mean there could be events like the war that really affected not just crypto but the rest of the financial market. And if I remember back in 2018 (start of the bear market that time), news of hacks and then the crackdown started the plunge culminating to the pandemic in 2020.

So now this is new factor affecting the price, specially the war that is going on in Europe. And as we try to recover from the pandemic, inflation sets in.

You forgot about probably the most important factor: the pandemic.

What we're seeing right now is in my opinion a direct result of how countries handled covid. Ukraine is just a secondary factor, but the primary one was money printing and giving it away in the form of stimulus packages to prevent the economy from collapsing while the lockdowns were in place. I believe the lockdowns and covid restrictions were unnecessary and the governments first issued those, then they printed money and now we're getting the inflation shockwave which is what's causing all stocks to go down and cryptocurrencies along with them.

There's nothing wrong with bitcoin. It's reacting to the world around it. Companies don't have money so they sell assets. Those who have enough money to hold through these hard times will come out on top when the trend reverses, and it always reverses. If it ever does not reverse we'll have a world war or some Mad Max type of chaos, so you won't need investments anyway

their biggest mistake

airline tickets have seasons too.
you can buy a ticket for july 2023 cheaper now than buying a ticket for july 2023 in june 2023
logic tells you to buy when cheap and hold onto the ticket. rather than wait and save more money to buy when the price goes up

silly people will wait and wait and wait until the last minute. buy at a premium and resent it later, by saying in october 2023 after the vacation 'i shoulda gone on vacation in november in 2022 or november 2023 because off-peak tickets are 3x cheaper"

buying things, anything.. when things are expensive are the crimes of 'pumpers' and elitists telling the mere mortal average joes to buy when the elites sell and sell when the elites buy.
or to buy during peak seasons because it 'helps the economy grow more'. reality is the opposite and people need to learn to buy low sell high, not the opposite

I too agree with OP. Bitcoin is available and traded globally. So it is true that no single factor is impacting bitcoin and its price. There are multiple reasons behind the current bear market. Also people go through a psychological factors like FOMO. These type of people won't buy bitcoin when the price is at all time low. But this same population will buy once they see an upward trend.

For a global currency like bitcoin, it is always multiple factors that come into play. Also we have to keep in mind that it also goes through a bull and bear cycle.

4 year cycle is a big factor

what people need to truly train themselves into remembering is this simple fact:

the value. norm. is NOT i repeat NOT up high.
the high price is the speculative hype/bubble/temporary zone

too many people think the low is the 'crash' 'death' 'end'
its not.

the correction after the temporary high is the return to new normal(usually above any low from previous 2-4 years).
where by after the return. when the new 'rasied-bottom' of the cycle(2-4 year bounces) has become tested a few times, the price moves up

once people stop imagining bear markets as scary vicious events and instead best times to buy more, increase holdings then they will reap the benefits of it when things go bull

yep bears are times to run into the bear, grab it hold and hold it tight..
bull markets is the time to plan the exit route and decide when to run off..

too many people think the bull market is the time to buy in and hold. its not the bull market is when you make the profits by selling

buy the dip(bear) sell the hype(bull)

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aside from that. there are other fiat things happening in the world, which makes people want to swap assets for fiat to then use fiat to stock up on goods, resources for lifestyle stuff, whilst fiat goods prices are low before inflation makes them be priced higher. hoping if they can stock up on home resources quick. then they can use next months income to then accumulate their investments again before investment prices start to rise in the next cycle

Bitcoin and cryptocurrency is a money market that have a cycle with bear and bull market. The bear market will always come irrespective of other economic factors, same is the bull market. We had the longest bull market after the pandemic but some factors favored the long bull. Bull requires a lot of fund and the present interest of borrowed fund may have affected the abrupt dump. Exchanges take an important role in price manipulation and they work with the whales, so the market is not out-rightly decentralized.

Add pandemic. In march 2020 it was even under $4k before we saw the highest high. 

In my opinion it's the mainstream media. When price goes up the trend for them goes high. They starts hyping the media for bitcoin. As a result people think it's the time not to miss. Most people do not understand investment. They are driven by hype.

Bitcoin has moved in 4 year cycles almost since inception. It’s just the way it goes, maybe as time passes the market will become more mature & the price will be less volatile but we are not there yet.
The block reward halvening still plays a big part in the price, it is usually this that dries up the supply & availability of new coins on the market which leads to the very start of each bull run. The market eventually gets overheated, we reach a high & then we enter a new bear market.

Anything of value which is in demand increases in price if you cut the supply. We have at least 2 more 4 year halvening cycles of boom to bust, bull market to bear market before some form of price stability forms.

Some of the things mentioned in the OP do have some effect on the price but I am a firm believer in 4 year cycles & we are still going through them, almost like textbook. We are in a bear market now & will be for at least another 6-9 months. A bottom will arrive, probably coinciding with some kind of capitulation event due to real world shit. We will then move sideways with a slow uptrend as we near the 2024 halvening. We’ll rise & get a big all time high in 2025 at some point & then it’ll start all over again.

Rinse & repeat, the 4 year cycle trend is your friend (until it isn’t).
Now is certainly a great time to buy though.

It's mostly the people tend to follow others and take influence from the price of their investments.

When the price goes up, a lot of people buy more bitcoin and fomo into their holdings.
When the price stabilises, people get nervous or bored of their investment and start to sell - then others decide their investment is losing money and try to sell too and the price falls because not many people buy drops (unless they have an order places already) as its safer to buy when the price has stabilised again.

There are numerous major factors behind the current bear market.


Belief in specific characteristics of cryptocurrencies
Ukraine is at war.
People tend to follow others.
Interest Rates and Inflation


What you guys think?