After falling below $ 20,000 and hitting $ 17,600, what’s there for the king of cryptocurrencies? Will he be able to climb the slope or is this the beginning of a new fall?
Bitcoin Bounces Over $ 20,000
Despite some clearance, the overall market has remained in the red in recent weeks. Bitcoin does not escape this market degradation situation and like far from his ATH from last November at $ 69,000. During June, Bitcoin fell nearly 40% from $ 31,000 all the way to $ 17,600 at its lowest point.
Thus Bitcoin has passed below the symbolic mark of $ 20,000 for the first time since December 2020. The deteriorating macroeconomic situation, in particular record inflation, is certainly not related to this complex period for the crypto-currency market.
The United States, for example, recorded almost 8.6% inflation in May.. A very high figure that worries the markets and puts pressure on many investors to sell. On the bad news side too, many top tier companies like Coinbase have announced layoff measures in the face of these complex market conditions. One of the largest exchanges in the world to evacuate almost 18% of its employeesas well as the company BlockFi which will let almost 20% of their teams.
Bitcoin responded positively after touching $ 17,600 and is currently trading around $ 21,000. Despite this reversal, many analysts are pessimistic enough that Bitcoin can hold $ 20,000.
Luno exchange chief executive said:
This move may be a dead cat bounce. Bitcoin is oversold so this is a bounce of expectations.
However, Bitcoin would have to close over $ 23,000 in daily units of time, in the hope of a more lasting recovery. For other analysts, we may have found a bottom. Giles Keating, director of Bitcoin Suisse told CNBC:
We are close to a point where the excesses in particular the leverage effects have been ruled out. So a bottom could be created on these levels.
Even if he still believes in multiple liquidation, for him most of that fall is behind us now.
According to the Wallet Investor, a price prediction algorithm, Bitcoin may experience high volatility in the short term. This algorithm predicts a potential bottom of around $ 17,100 by the end of June.
However, still according to this indicator, the long – term outlook is more optimistic. WI is predicting Bitcoin at $ 37,000 in the next 12 monthsan increase of almost 90% from the current price.
We certainly need to be patient and wait for real signs of recovery as the story seems complicated to read. For many analysts, these levels are seen as opportunities, especially for investors practicing the DLP on Bitcoin. The coming weeks will confirm whether the bottom has just been reached or if Bitcoin will continue its descent.
Crypto-assets are a risky investment.