A Downturn In The Most Popular Cryptocurrency – Bitcoin Falls Below $20,000
Sometimes, an unlikely event happens that we never think of. Bitcoin, the ever-increasing cryptocurrency, has faced a downturn in its price since December 2020. Right afterwards, the price of bitcoin is under $25,000 at this time. Over the weekend, there was a lot of price pressure on bitcoin. The entire market is in freefall, and the value of all cryptocurrencies is now below $1 trillion.
Since the start of 2022, the crypto market has been on a downward trend. As the market gets closer to mid-June, the bulls do appear to be becoming stronger. The Celsius network, which stopped transactions because of liquidity concerns, has been blamed for the current decrease below $25,000. Investors who had not yet recovered from the Terra catastrophe were alarmed by the statement.
Bitcoin In Deep Recession
Although Bitcoin is struggling financially, its losses are not as great as those altcoins are now experiencing. Peter Schiff, an economist, stated over the weekend that Bitcoin's price was about to plunge below $20,000 and that the market valuation for all cryptocurrencies will drop below $800 billion. He cautioned investors against buying the drop since doing so would result in more losses.
Bitcoin has finished 12 weeks of trading in the deep recession. The price of Bitcoin falls from over $49,000 in March of this year to about $23,900 at the moment. Mid-May saw signals that the coin was reaching the worst point, but the inflation measurements reported last week further alarmed the market.
In May, the consumer price index rose by 8.6% on yearly basis, which was less than the predicted decline. Stock markets that collapsed concurrently with the crypto sector were impacted by the data. Bitcoin had good support at $29,000 prior to the current slump. The coin might challenge the 20,000 levels, though, if it drops below these levels. The Relative Strength Index (RSI) has dropped below 30 due to the severe selling pressure. Depending on the technical information, short-term traders may interpret this as a signal to purchase Bitcoin at the present low.
High Rate Of Inflation – A Big Reason For Bitcoin’s Slump
The geopolitical and economic unrest and soaring prices are wreaking havoc on the world's financial and cryptocurrency markets. Given that sellers have controlled the cryptocurrency market for a while now, the high rate of inflation in some of the world's strongest nations has made their investors ready to remain alert to face anything that can happen.
Will Bitcoin’s Price Fall Below $20,000?
According to Coinmarketcap, the current Bitcoin price is $21,225.23 USD with a $42,745,427,582 USD 24-hour trading volume. What can we expect if the price dropped below the value of $20,000? Experts are speculating on whether Bitcoin will drop below the $20,000 threshold and what would happen if it does as a gloomy mood sweeps the financial markets. The bitcoin price, which is firmly in a bearish market and has dropped from its ever-high price of about $69,000, is presently just over $22,000. Most analysts explain this decline to deteriorating economic factors, such as increasing inflation and interest rates.
reaching the 20,000-mark
Investors are currently focused on the $20,000 price line, which not only serves as a crucial psychological barrier level but also marks the apex of Bitcoin's most recent price surge in 2017. Bitcoin has never dropped below the top price of a previous bull run in a down market. The thing that has changed is that Bitcoin needs to travel a much less distance to reach that milestone. Sam Callahan, a Swan Bitcoin Analyst, thinks that it's feasible that Bitcoin might decline by more than 80% from its all-time high, as it did in December 2018 when it dropped to just around $3,000, based on knowledge from prior bear markets.
That would indicate that Bitcoin might decrease this cycle by as low as $13,800. In contrast to prior downturn markets, the investment base for Bitcoin is significantly different and more intelligent. Because Bitcoin's long-term value argument is still intact, I believe we would experience significant purchasing pressure at those lowered price levels if the price fell below $20,000.
When Should Investors Buy Bitcoin?
Due to the steep decline in the market value of Bitcoin, which has put many investors on edge, selling pressure may become more intense. When compared to other cryptocurrencies, Bitcoin appears to be a safe fall, according to the charts. For instance, Solana is down to $27 while Ethereum has dropped to $1200.
The conversion of big investors' little assets to bitcoin may help the recovery. The markets, though, might decline even lower given the current debate over Celsius becoming another Terra. Additionally, before stopping withdrawals, Celsius moved its assets to the FTX market. If these assets are thrown onto the market, further losses can be seen.
As a result, investors might hold off on purchasing Bitcoin until they see if the price reaches $20,000. Given all the underlying unfavourable market variables, it can take some time before a meaningful price movement toward $30,000 forms.
Conclusion: Investors Should Be Cautious While Investing
Every rise has a decline. This is the universal truth that nobody can deny. Because of the gradual increase in Bitcoin’s price, no body could ever imagine a downswing in the value of Bitcoin. But, due to the increasing rate of inflation and other market conditions, it’s quite shocking for the investors that Bitcoin’s value has dropped from a big rise of $69,000 to $22,000. According to experts, investors should use prudence and make small investments in cryptocurrencies given the state of the market. Given the current conditions of the bull market, investors should be careful while investing and implement their investment plans in accordance with their level of risk tolerance. Increasing prices are a problem for the capital markets, and relief will occur with inflation dropping down to an appropriate level.
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