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Growth stock Tesla has come under huge selling pressure correcting 72% year-to-date and giving a lead to Bitcoin. Some market analysts believe that the bear market in crypto is far from over and there’s more pain to come ahead.
The world’s largest cryptocurrency Bitcoin (BTC) has witnessed one of the most brutal price corrections in history while collapsing 66% year-to-date. Currently, the BTC price has been struggling enough to move past the $17,000 level. But as we know, Bitcoin has been closely following the US equity market wherein growth stocks have taken a heavy beating. As Wall Street opened up after the recent Christmas holiday, the volatility has been largely on the downside with BTC/USD pair heading lower. On the other hand, unlike Bitcoin, the Tesla (NASDAQ: TSLA) stock has continued with its free-fall journey and is on the path to recording its worst month, quarter, and year.
The TSLA stock has corrected by a staggering 72% year-to-date making it one of the worst-performing years for the electric carmaker. Since Bitcoin largely compares to growth stocks, market analysts have also started comparing it to the Tesla stock performance. Mike McGlone, the senior commodity strategist at Bloomberg stated:
“Bitcoin Crosses, the Crypto Looks to Regain Upper Hand Over Tesla – The near certainty of declining #Bitcoin supply vs. the rising amount of #Tesla shares outstanding favors outperformance by the crypto, if the rules of economics apply.”
On the other hand, electric carmaker Tesla continues to face the heat of production slowdown as its Shanghai gigafactory has been shut down for a while amid the surge in Covid-19 cases in China.
When Will Bitcoin Recover?
It’s difficult to predict the Bitcoin price considering that it has already been corrected so far. However, the global macros are in no condition to support any kind of pullback. Also, the technical indicators are supporting Bitcoin and other digital assets and some market analysts believe that the sell-off is far from over yet.
I can't stress this enough.
The sell-off will accelerate in the coming weeks. This bear market is far from over. pic.twitter.com/Luk4yTR8Q5
— Toni Ghinea (@ToniGhinea) December 27, 2022
Furthermore, Bitcoin whale activity has significantly dropped over the last few weeks. The total number of large transactions on the Bitcoin network with a value greater than $100,000 has touched a new yearly low of 8040 transactions.
Popular crypto analyst Ali Martinez reporters: “The number of new addresses created on the $BTC network has been trending down. It has decreased by 8.16% in the past seven days. This network activity suggests that investors aren’t interested in buying #BTC at the current price levels”.
He further explained:
“Bitcoin sits between two significant supply walls. One at $16,600 where 1.46 million addresses hold 915K #BTC and the other one at $17,000 where 1.27 million addresses hold 730K $BTC. A sustained move outside of this area will likely determine the direction of the trend”.
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