Bitcoin is experiencing eight consecutive weeks of losses for investors for the first time in its history. This is due to weak macroeconomic sentiment, inflation concerns, systemic risks within the crypto industry, and a lack of immediate catalysts to drive growth higher.
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Prices were at $30,272 on Sunday evening after falling as low as $28,700 earlier in the week. Bitcoin last posted a positive week of gains in mid-March, when its price rose from $41,000 to $46,000. Since then, it has fallen every week, dropping nearly 60% from its November peak of just over $69,000.
Factors affecting bitcoin prices include interest rate hikes in the U.S. and global inflation concerns, so bitcoin has traded much like a risky tech stock in recent months.
Data from analytics platform Santiment suggests bitcoin prices are bottoming out at current levels and could rise in the coming weeks.
The company's Weighed Sentiment tool, which calculates positive and negative comments about an asset on social media, suggests that public sentiment for bitcoin has reached levels last seen on "Black Thursday," a colloquial term in cryptocurrency circles that refers to the price of bitcoin falling below $4,000 in 2020.
Historically, prices are more likely to rise when confidence reaches low levels, the firm said. The data shows that the bitcoin price has risen in three of the last four instances when the indicator reached a similar level.
Recession fears have also contributed to a decline in bitcoin prices in recent months.
In April, Goldman Sachs analysts said in a note that the Federal Reserve's aggressive measures to control inflation could trigger a recession. In the report, the bank predicted that economic contraction, a phase of the business cycle in which the economy as a whole shrinks, would be about 35 percent over the next two years.
Some analysts noted that institutional investors have pulled more money out of the ecosystem than they have put into funds, suggesting a general bearish sentiment that may also have contributed to the price decline.
"CoinShares data last week showed a record weekly outflow of institutional investors from crypto funds year-to-date," FxPro market analyst Alex Kuptsikevich told CoinDesk in an email. "Funds are trading cautiously, which could slow growth, while retailers and cryptocurrencies are buying on price declines."
The market is made up of sporadic participants who want to "ride the wave" but are not cryptocurrency enthusiasts by nature, Kuptsikevich added.
This article was translated by Marina Lammertyn.