On the back of adverse global economics and rising inflation, the price of Bitcoin (BTC) has dropped another 3%. So, if you think now is the best time to average, you might want to hold off a little longer.
Colin Wu, a famous crypto reporter, writes that huge investors, most likely institutions, are building large short positions in Bitcoin, citing data from Datamish.
Over the last two weeks, the world’s largest cryptocurrency, Bitcoin, has been gripped by high volatility. During this time, the Bitcoin price rose twice beyond $40,000, but it was unable to hold these levels and has been trading under downward pressure.
However, if the large build-up of short positions proves to be correct, we can expect Bitcoin to go below $35,000 and even lower to $30,000. Many analysts haven’t ruled out the chance that Bitcoin’s price may drop below $30,000.
Bitcoin has been exhibiting high volatility in the $35K-$45K area. However, whenever it passes $45K, it is met with significant resistance and is forced to retreat.
The market, on the other hand, will remain volatile in the future due to rising inflation numbers. In the coming weeks and months, the Fed is expected to raise interest rates, and this time it may be more aggressive due to increasing inflation.
While Bitcoin is a terrific long-term investment, it requires patience due to the short-term volatility.
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