Bitcoin struggles to maintain $30,000

Bitcoin price continues to weaken, the king of cryptocurrencies again lacked the strength to hold in the zone above $30,000 and is once again slipping to the area of $29,000. Does a drop to support near $22,000, where the 200-session average runs, still seem likely?

• Cryptocurrencies are losing again amid weak stock market indices and persistent risk aversion;

• Supply near $32,000 was very active and once again dominated the bulls in this zone hoping to permanently break 9 consecutive declining weeks of Bitcoin trading;

• Forecasts pointing to Bitcoin's bottom at $24,000 seem optimistic. In previous downturns Bitcoin has always broken key zones, currently it is still holding above them and has not slipped below $24,000 where according to on-chain data its proper valuation is, let alone below the $22,000 set by the 200 session weekly average;

• May was definitely not successful for cryptocurrencies, but some investors are already positioning themselves for the rest of the year keeping in mind, among others, Ethereum's transition to version 2.0 announced in August, major changes in the Cardano network and a potential rebound in stock market indices herald a rebound among cryptocurrencies;

• Elon Musk and CEO of JP Morgan, Jamie Dimon, among others, have already sounded the alarm about the growing problems of the global economy in recent times. Cryptocurrencies have been assets that have historically benefited from positive market sentiment towards risk. We are now seeing the reverse of that pattern, and it's hard to say when investors will change their perception of the new inflationary reality for good;

• Populations' savings melting through inflation and fuel prices may indicate that retail investors' capital will not return to the cryptocurrency market as quickly as bulls would like. Even the manager at innovation-investing fund Ark Invest, the popular Cathie Wood, has joined the ranks of those abstaining from the very optimistic forecasts;

• At the same time, many indicators continue to support the long-term growth prospects of Bitcoin and the digital asset sector as a whole. Over the past 10 years, the return on investing in Bitcoin has been incomparably greater than that of the NASDAQ, the S&P500 or even the largest technology companies. Investors are aware of this and may still choose Bitcoin as a sort of 'lottery ticket' and component of a long-term, diversified portfolio. However, until market sentiment improves and risk aversion passes, a drop in Bitcoin to $22,000 seems still possible.

Historically, the Bitcoin price has cyclically in each of the previous bear market touched the 200 MA on the weekly interval (green line). The chart doesn't show it, but short-term declines near the 200 MA almost always ended in a flash crash up to 30% below it, but the demand side quickly took control and the price returned above the average. These levels also turned out to be the best buying opportunities for long-term investors. Source: ArkInvest

Recently, we have witnessed a powerful impact of Bitcoin on the exchanges which was directly related to the Luna crash. Historically, levels when exchanges have seen record highs have also proven to be good buying opportunities for buyers. Source: ArkInvest

Nearly 66% of Bitcoin's total supply today is in the hands of long-term holders who hold it on them for a minimum of one year. Thus, we can see that the number of long-term investors is increasing and may indicate a maturation of the market and provide a fundamental basis for further increases. Source: ArkInvest