Market Cap
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76486
Markets
2022-01-19

January is a weak month for crypto. When will there be a rebound?

The cryptocurrency market faced another day of weakness on January 18 as the price of Bitcoin ( BTC ) plummeted, putting additional pressure on the altcoin market. Currently, the Crypto Fear and Greed Index has registered "extreme fear" among investors, with some traders warning that the price of BTC could soon fall below the recent swing of $39,000.

The data shows that the bulls lost control of the $42,000 support level during early trading hours on January 18, when the bears hammered the BTC price to a daily low of $41,250.

Many cryptocurrency holders who were disappointed by the lack of a blowout top to close 2021 are also expecting the fireworks to begin in 2022, but historically speaking, January "has been one of the most disappointing months for BTC," according to a recent report from Delphi Digital.

Delphi Digital pointed to "slowing global liquidity growth and tightening political expectations" as the main source of hurdles for Bitcoin and highlighted that these factors have also led to weakness in the stock market, which is believed to be highly correlated with the price moves seen in BTC.

Another source of weakness identified by Delphi Digital was the lack of liquidity in the perpetual and futures markets along with the decline in the number of open BTCs over the past two months.

The analyst suggested that based on the size and consistency of the BTC payout over the past two months, "a move out of the range upwards is ultimately the most likely outcome, and they expect the price to "approach the 200 DMA and the summer breakdown point at around $49,000 - $50,000."