Bitcoin (BTC) has fallen more than 37% this year and has once again fallen below the $30,000 mark. However, one researcher sees the potential for even more downside.
Josh Olszewicz, head of research at investment manager Valkyrie, says volatility needs to settle down for the bitcoin price to gain a foothold at the lower bound in the near future.
"We can look at things like the 200-week moving average, which is around $22,000. We can look at the realized price, which is the average price of the coins that have moved on the chain, and that's at $23,800," Olszewicz said on CoinDesk TV's "First Mover." "This [move to bottom] will probably take at least the entire third quarter, maybe the fourth quarter, if it happens this year."
Olszewicz said other factors, such as the Federal Reserve raising interest rates, also play a role in Bitcoin's market performance.
He suggested that institutional investors may be leading the downturn. Olszewicz cited that the average size of on-chain moves is in the tens of thousands of BTC.
"A lot of the volume is certainly led by institutional flows," he said.
Nonetheless, Olszewicz said market movement continues to depend more on small traders than institutional investors. He sees those who want to learn about cryptocurrencies getting in during this bear market to "test the waters and see if they can survive."
"We've seen these ups and downs before, and if individuals are learning about Bitcoin for the first time again, the cycle could repeat itself," Olszewicz said. "Since 2018, the average number of bitcoin-holding wallets has grown from more than 27 million to more than 41 million today."
He added, "We're seeing a lot of people not only sticking around, but getting excited again about what's happening in this space."