Markets have ended January poorly since 2015 – optimistic February expectations
The crypto market has lost $500 million in value this month and it looks like the crypto bull market is coming to an end.
It’s been a tough few weeks for Bitcoin, Ethereum and other digital assets after the market has fallen by more than $1 trillion since its November peak.
Now the market is closing out January, its worst since 2015.
According to data from TradingView, the global crypto market cap has lost $500 million this month, from around $2.2 trillion to $1.7 trillion today. While serious, the 22.7% drop isn’t the only monthly drop crypto enthusiasts have suffered in recent months. In December, the market rose 15.5%. The market took a devastating plunge last May amid concerns over China’s Bitcoin mining ban and a congested environment, ending the month down 24.1%.
While the May crash is the heaviest crash the market has seen in a while, this month’s performance appears to be crypto’s worst January on record. Two years earlier, the market had started the year with a green month. In January 2019, the market lost about 9.4% in value. January 2018 ended down 15.3%, the start of an extended downtrend that saw the market lose 80% of its value over a one-year period. At the end of 2018, Ethereum lost 94% from a high of $1,430 to $80. Many other assets fell more than 95% and never recovered to new highs.
At press time, Bitcoin is down 44.5% from its all-time high of $69,000. Ethereum is down 45.7% from its peak, and many of 2021’s winners – including Solana and Axie Infinity – have lost more than 60% of their highs. Dog-themed memecoins Dogecoin and Shiba Inu are down about 80% and 75%, respectively.
While major assets have been hit hard so far in part due to Omicron fears and the threat of rate hikes from the Federal Reserve, some corners of cryptocurrencies are exploding. NFT has performed exceptionally well over the past few weeks, likely because most traders value their digital collections in Ethereum. According to data from Dune Analytics, OpenSea posted a record $4.8 billion in revenue this month as demand for hot collectibles like the Bored Ape Yacht Club and Cool Cats surged.
February has a reputation for being bullish on bitcoin
Data from on-chain analytics resource Coinglass shows that January 2022 was the only red month since 2018 and the second red month since 2015, down 0.39%, just behind a 10.59% drop of 2018. However, investors are still waiting for the “blow-off top”.
BTC price action continues to underperform this month.
According to data from TradingView, at the current spot price of $38,536, BTC is down nearly 20% year-to-date, contributing to the decline that began in November.
BTC/USDT monthly chart. Source: TradingView
Historical numbers show that January is typically a “green” month for Bitcoin. For example, prices have increased by more than 21% in 2021.
Bitcoin’s last “red” in January was in 2018, when enthusiasm for the rally to the all-time high of $20,000 quickly cooled.
The peak of the previous halving cycle occurred after about 18 months. As such, this should have happened again in late 2021. In fact, this has not happened and Bitcoin’s underperformance has drawn criticism from the trusted price tracker.
As we look at what could break the downtrend next month, February also has history when it comes to bitcoin price strength.
Last year, BTC surged nearly 37% in 4 weeks, while February’s steep drop last happened in 2014. In contrast, Bitcoin barely moved in 2018.
Bitcoin Monthly Earnings Chart | Source: coin jar
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