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Crypto Prices to Drop Further in the FTX-Collapse-induced Bloodbath?

Bitcoin price will likely decline more as institutional investors pull capital out of crypto. Institutions and large-wallet investors might not enter crypto markets owing to the FTX crash and reduced volatility in the space, according to experts.

With the recent spike in Bitcoin price volatility subsiding, experts are saying that institutions are unlikely to re-enter crypto markets with major force yet. Institutional investors have been cautious about the recent volatility in the market.

The catastrophic FTX collapse and the bankruptcy filing that followed right after triggered a bloodbath in cryptocurrencies. Bitcoin declined 13% within ten days, hitting a bottom of $15,900 before recovering to the $16,500 level.

Bitcoin and Ethereum price movements have been declining since January 2022. A lack of volatility forces large-volume traders out of the cryptocurrency market as it gives investors less opportunity to generate gains.

Before the FTX crashed, Bitcoin was trading in the $19,000 to $20,000 range. As the FTX filed for bankruptcy, BTC dropped to the $16,500 level. Ben McMillan, CIO of crypto index provider IDX Digital Assets, said that most of the institutional investors are content to sit on the sidelines and wait, they are not completely out of the game, but they are not playing at the moment, especially amid the macro backdrop.

According to McMillan, crypto investors are anxious about future developments that will potentially send crypto markets spiraling further. Traders are waiting for Bitcoin to find its bottom. Experts are saying that BTC and other cryptocurrencies are closer to the bottom of the cycle right now.

BTC bear markets usually find their absolute bottom price approximately a year after hitting an all-time high. And hence, BTC should find the absolute bottom now, given that it has been 365 days since the Bitcoin bull market was at its peak of $65,000.