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Home > Blog > Editor Pick > Bybit X Nansen Report Confirms Q4 Crypto Market Outlook Remains Bearish
2022-10-16 16:16:28
Bybit X Nansen Report Confirms Q4 Crypto Market Outlook Remains Bearish
Editor Pick
Bybit and Nansen have released their crypto industry report for September 2022. The markets remain somewhat bearish, affecting crypto assets, NFTs, and the DeFi segment. However, not everything is doom and gloom, either.
Market Sentiment Remains Subdued
It is not entirely surprising to see the cryptocurrency sentiment in negative territory. Markets continue to make newer lows and have retraced almost 69% from the November 2021 highs. However, September's market levels were still nearly 12% above the lows of June 2022. That offers some long-term hope, even if intraday volatility remains prevalent.
That said, the report indicates a growing correlation between equities and Bitcoin. That correlation became more outspoken and will likely lead to further market volatility. That outlook is compounded by growing net inflows of BTC across exchanges. Momentum intensified in September, surpassing 58,000 BTC, creating more selling pressure. Even The Merge has not offered much relief and has triggered heightened BTC exchange inflows.
The situation doesn't look much better for ETH. Massive exchange inflows occurred near The Merge's date resulting in almost 322,000 ETH hitting exchanges in September. That may be due to the airdrop of ETHW tokens, creating new opportunities for investors and speculators. However, selling pressure will remain prevalent, with more supply hitting exchanges than being withdrawn.
Last but not least, there are stablecoins. Lower crypto prices tend to spark supply expansion, although that trend reversed quickly in September.
A retracting stablecoin supply will put more pressure on crypto prices. Even so, BUSD gained more market share from USDC. That came at the cost of a higher exchange net inflow sparking more derivative trading. On the other hand, spot trading maintained weak volume throughout most of the month.
Q4 2022 Outlook Remains Bearish
The above statistics paint a rather bleak outlook for cryptocurrencies in Q4 2022. Higher inflows of BTC and ETH, combined with lower stablecoin supplies, are potent. In addition, the correlation between BTC and equities makes the combination rather volatile. Overarching macroeconomic conditions remain unfavorable and will continue hindering crypto value growth.
Investors did not care much for The Merge or ongoing developments across Layer-2 projects. Scaling blockchain technology remains crucial, yet it did not spark any notable market excitement. Additionally, the Bybit and Nanse report confirms there is still healthy interest from investors. More specifically, there is continued capital support from VCs. Bear markets are a time to keep building, and those financial injections pave the way for future industry growth.
However, it remains uncertain if those developments can spark market momentum. When even The Merge has nearly no impact, nothing else will. Therefore, everything under development now will need to make an immediate market impact once these projects launch. That is a tall order when the overall industry outlook remains bearish.
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