Alice Liu, head of research at CoinMarketCap, one of the most frequently used price tracking platforms in the crypto money ecosystem, made critical evaluations.

Bitcoin (BTC) has so far resisted falling below the psychologically important $20,000 threshold. Ethereum (ETH), on the other hand, remains above $ 1,000 for now. According to experts, losing these levels could cause sales to accelerate.

Alice Liu noted that there is “Extreme Fear” among investors, noting that the Crypto Fear and Greed Index dropped to 7 this week. This is the lowest we've seen since March 2020, when the World Health Organization declared the coronavirus a pandemic. Liu also argues that this crypto winter is different from the bear market witnessed in 2018, when BTC fell more than 80% in a year.

   “At a time when global markets are reeling from uncertainty and facing the risk of recession, cryptocurrencies are entering a bear market. This is a first time event. When the global economic outlook is not bright, fear in the cryptocurrency market increases. The current bear market is ”macro-driven” and "The high correlation with the stock has hurt the Bitcoin price. The Hodler mentality has also been negatively impacted. There is less willingness to 'buy the bottom' at current levels where the price is expected to drop further. In previous bear markets, we were witnessing more dips."

Bear

Alice Liu believes that the current crypto winter is different from 2018. According to the manager, the massive spikes in the current bear market in a short time are damaging the Hodler mentality. Glassnode reported this week that selling pressure has also increased from long-term Bitcoin investors. However, Liu says that cryptocurrencies are closer to bottoms than other assets.

Liu pointed out that Bitcoin has fallen 30% in the last week alone, as Terra's collapse and Celsius Network's financial crisis have put pressure on the crypto ecosystem recently. A series of margin calls further complicated the issue, while rumors of liquidation catastrophe hurt the market. Problems in Binance also began to shake investor confidence.

According to the expert, all these events have hit the cryptocurrency market hard, and the industry is going through a critical test. The total market capitalization of cryptocurrencies dropped by $379 billion last month. This is a 28% decrease. According to experts, for the Bitcoin price to regain momentum, the Fed needs to abandon its monetary policy of quantitative tightening and rate hikes.