Bitcoin has been down almost 30% in the past week. Some experts believe that BTC could continue to crash. What does the number 1 cryptocurrency expect now?
Bitcoin for under $ 20,000 – and then?
As the bearish outlook passes through financial markets, experts estimate whether Bitcoin will break below $ 20,000. And what would happen if that happened.
Bitcoin, which is now firmly in the bear market, is currently trading at just over $ 22,000. A significant drop from an all-time high of almost $ 69,000.
And a correction that most observers attribute to deteriorating macroeconomic conditions such as rising inflation and interest rates.
Currently, all eyes are on the $ 20,000 price line. Not just because it is a significant psychological resistance, but also because because it marks the peak of Bitcoin ‘s last bull run in 2017.
In previous bear markets, bitcoin has never fallen below the price that marked the peak of the last bull market. The difference this time, however, is that Bitcoin has a much smaller distance to travel to reach this mark.
Bitcoin Swan analyst Sam Callahan, based on bear market experience in the past, believes that Bitcoin could fall more than 80% from its all-time high.
As was the case in December 2018 when it dropped to just over $ 3,000. That would mean that Bitcoin could fall as low as $ 13,800 in this cycle.
But Callahan is not too worried when that happens. Hogmanay:
“It is important to note that the Bitcoin investor base is very diverse and sophisticated compared to previous bear markets. If bitcoin fell below $ 20,000, I believe I would see significant buying pressure on these reduced price levels as the long-term value proposition of bitcoin remains intact. ”
Bitcoin could go back to $ 12,200
Yuya Hasegawa, a crypto analyst for the Japanese crypto exchange Bitbank agrees.
Already last month, Hasegawa said that that bitcoin could fall as low as $ 12,200 during this mark market. But now her outlook is more optimistic. Hasegawa:
“I think bitcoin could temporarily fall below $ 20,000 but it will probably bounce back quickly.”
However, not everyone is so optimistic.
Marcus Sotiriou, an analyst at British cryptocurrency firm Global Block, believes there could be more downside if Bitcoin breaks below $ 20,000. Sotiriou draws attention to the controversy surrounding the Celsius crypto lending company.
The company could be insolvent – and suffering from an apparent liquidity crisis that forced it to halt all user withdrawals earlier this week. Sotiriou:
“Celsius [ist] in big trouble, and the liquidation of the whales making leverage bets on Bitcoin and Ethereum could lead to further disadvantages. ”
According to Sotirious, many would fear a liquidated cascade if Celsius, for example, received a margin call and now has a liquidated price of about $ 17,000 for its BTC position, the analyst said.
Mandatory liquidations occur when investors are forced, unexpectedly and involuntarily, to close positions in Bitcoin derivatives (such as futures and options) after their accounts no longer have enough collateral to hold those positions. That kind of forced sale it puts extra pressure on the bitcoin price. That can further reduce the price. And that will lead to more liquidations – hence the “easement”.
Former BitMEX CEO Arthur Hayes sees more crash risks
Arthur Hayes, Former CEO of BitMEX, it also points out that there may be such a risk in the Twitter thread. Looking at the cryptocurrency derivatives market, Hayes said: Open interest – number of futures and options contracts still to be settled – currently $ 20,000 for Bitcoin and $ 1,000 for Ethereum.
As the market approaches these levels, more traders with open positions will be forced to sell their cryptocurrencies on the spot market to hedge their positions, Hayes explains.
And if those levels break, “we can expect huge sales pressure” in the market, according to the crypto billionaire.
If these levels break, $ 20k $ BTC & $ 1k $ ETH, we can expect huge sales pressure in the spot markets and dealers themselves. We can also expect that there will be some otc dealers who will not be able to hedge properly and may rise.
– Arthur Hayes (@CryptoHayes) June 14, 2022
How bad can it get? When that happens, Hayes tells crypto traders, “You could also turn off your computer [weil] Your charts will be out of use for a while ”.
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