[Bitcoin Now] Recovery to $20,000 After Bottom Buying... Experts Say "Too Early to Be Optimistic"

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] As bargain buying continues, the price of the representative cryptocurrency Bitcoin is showing an upward trend.

According to the global cryptocurrency market status relay site CoinMarketCap, as of 9:31 a.m. on the 22nd, the price of Bitcoin was $20,662 (approximately 26.75 million KRW), up 0.69% from the previous day.

The price of Bitcoin plunged due to the U.S. Federal Reserve's giant step (0.75 percentage point interest rate hike) and recession concerns, but bargain buying inflows caused an upward trend. Cryptocurrency investment firm CoinShares explained in a weekly report that institutional cryptocurrency operators net purchased about $28 million (approximately 3.62 billion KRW) worth of Bitcoin from the 14th to the 20th of this month (local time), suggesting they took advantage of the weak price. Bitcoin, which had fallen to the $17,000 range on the 19th of this month, recovered to the $20,000 range on the 20th.

Additionally, the number of wallets holding small amounts of Bitcoin also showed an increasing trend. According to data from cryptocurrency data analysis firm Glassnode, on the 9th of this month, when Bitcoin was in the $30,000 range, the number of wallets holding at least one Bitcoin was 850,586, which increased to 866,855 the day before. Also, during the same period, the number of wallets holding at least 0.1 Bitcoin and 0.01 Bitcoin increased. The number of wallets holding at least 0.1 Bitcoin rose from 3,541,058 to 3,599,218, and those holding at least 0.01 Bitcoin increased from 10,107,671 to 10,247,704.

However, experts say it is too early to be optimistic despite this upward trend. Alex Kupshikevich, Senior Market Researcher at FxPro, explained, "This recovery has somewhat calmed the extreme overselling of cryptocurrencies," but added, "It is still too early to talk about a long-term reversal." He continued, "Until aggressive monetary tightening policies become the norm, financial market pressures can quickly neutralize cryptocurrency rebounds."

Meanwhile, according to cryptocurrency data provider Alternative, the Fear & Greed Index, which indicates investor sentiment, rose by 2 points from the previous day to 11 points (extreme fear) on the same day. Alternative's Fear & Greed Index means that the closer to 0 points, the more pessimistic fear investors feel about investing, and the closer to 100 points, the more optimistic they are.