Is the Bitcoin Supercycle Dead?

  • Bitcoin price faces increased volatility and drops below the $ 31,000 level.
  • The super cycle thesis takes a back seat, while BTC pulls back in a risk-free environment.
  • Claims that BTC is a hedge against inflation are being scrutinized in the current market scenario.

Bitcoin is sold off, and traders are watching the current price movement. The digital asset could be set to its lowest closing price in 2021 after today’s decline. The broader environment is causing investors to lose confidence. If we were in a bitcoin super cycle, its end could bring a market crash.

Bitcoin price crash likely caused at the end of the Bitcoin super cycle

A super cycle generally refers to a decade-long bull run of commodities, but financial analysts have applied the term to Bitcoin. Supercycles are synonyms for increasing price action with a positive feedback loop. A combination of investor confidence and confirmation bias is driving prices higher.

This narrative is similar to the series of events that caused Bitcoin price to peak at $ 64,863 in mid-April. The Bull Run, which began in 2020, can be compared to a super cycle that appears to be nearing its end. Nonetheless, the end of the Bitcoin super cycle is marked by a dramatic drop in prices.

The current risk-off environment has caught traders vigilant fearing slow growth in the second half of 2021. Keith Lerner, Chief Marketing Strategist at Trust Advisory Services, emphasized the importance of trust in traders for Bitcoin price growth:

Investing in these cryptocurrencies is based on trust and liquidity, and since you have a little less trust, you only have a more difficult short-term environment for the cryptocurrencies.

Crypto investors have long believed that Bitcoin is a hedge against inflation. A month before BTC hit its peak, BTC reinforced that narrative by protecting holders from a weakening US dollar.

Inflation worries reversed the impact, and Bitcoin’s price was cut in half shortly after hitting an all-time high. This coincides with the time when most analysts predicted that Bitcoin would become increasingly valuable. Instead, the flagship cryptocurrency has fallen 50% against the US dollar.

Hedging against inflation is confronted with external effects in an uncertain macroeconomic environment

The Bitcoin network has proven its resilience in the face of the “Great Mining Relocation” from China to North America. More than 40% of BTC miners have pulled the plug. Still, the network continues to survive the crackdown and scrutiny of regulators, providing traders with inflation hedge for most of the past decade.

Growing uncertainty in the macro environment has had a negative impact on Bitcoin price, but crypto Twitter is refusing to let the argument rest and @BTC_Archive has stated that Bitcoin bought at previous price levels was a hedge against current inflation represents what supports the narrative.

I bought #Bitcoin when I realized central banks weren’t going to stop printing money.

My winnings have already secured the future.

Only an idiot would wait for “official” CPI data.

– Bitcoin Archive (@BTC_Archive) July 13, 2021

All in all, the Bitcoin super cycle may not be dead if confidence increases in the long run.

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