Swiss Crypto Bank Sygnum CIO: Bitcoin may decline further in the short term due to liquidity tightening, but the long-term bullish outlook remains intact

Deep Tide TechFlow News, on March 3rd, according to CoinDesk, Swiss cryptocurrency bank Sygnum’s Chief Investment Officer Fabian Dori stated that the recent Bitcoin correction was mainly driven by liquidity tightening rather than a fundamental structural collapse. He believes that Bitcoin volatility will remain high in the short term, and prices may further decline. Market sentiment has fallen to extreme fear levels, increasing the risk of more volatility and downward movement.

Dori pointed out that since June last year, the U.S. Treasury Department’s issuance of bills and bonds has significantly increased the total account balance, effectively withdrawing liquidity from the market. As one of the most sensitive asset classes, the cryptocurrency market has been notably affected.

Despite the bleak short-term outlook, Dori remains optimistic about the long-term prospects, citing factors such as improving business cycle data, growth in stablecoins, and increased institutional participation supporting a constructive long-term outlook. The current market environment is completely different from the systemic risk environment of 2022.