Bitcoin fell below $20,000 on Saturday to its weakest level in 18 months. It widened the slump on investors’ concerns about growing troubles in the industry and general pullback from riskier assets. It broke $20,000 to the downside on Sunday. But then, after a record-breaking series of declines, it led the cryptocurrency market with a rapid turnaround. So, what are analysts waiting for now?
BTC has seen some pretty wild price movements in recent months.
The world’s largest cryptocurrency climbed 16 percent in the past day. This offset the losses of a steep drop that brought the token down to $17,599 on Saturday. ETH, which fell to $ 881 on the sale, increased by 26 percent to $ 1,140. Meanwhile, many altcoins from Avalanche to Solana also made gains. “I think we’re starting to hit levels near bottoms where institutional investors see buying opportunities,” said Paul Veradittakit, partner at crypto-focused hedge fund Pantera Capital.
The crypto market is known for its wild volatility, especially on weekends when movements can be magnified. Even in its most recent rally, Bitcoin has fallen more than 30 percent this month. It’s trading roughly 70 percent behind the all-time high it reached in November. Bitcoin’s plunge on Saturday pushed the cryptocurrency below $19,511, the highest it hit during the last bull cycle in late 2017. In nearly 12 years of trading history, Bitcoin has never dropped below previous cycle peaks.
Is Bitcoin at risk of falling to $13,900?
Katie Stockton, managing partner and founder of Fairlead Strategies, said that the coin has also passed a technical support level of $18,300. Consecutive weekly losses below this level would increase the risk of the next drop to the $13,900 support, she added. As for trading now, Stockton said the short-term, “reverse trend” technical signal “offers some hope of a rebound in the near term.”
Still, he cautioned against buying the dip, as the “acceleration is strongly negative.” Some in the crypto community on Twitter cited $20,000 as an important pivot point that could provide support if rebounded and held over the next few days. Mati Greenspan, founder of Quantum Economics, stated that the $20,000 level is “significant” as it represents a 2017 high. He also said, “Since then, it has acted as both support and resistance on many occasions. If we can buy and hold above this level, it could be bullish.” said.
Bad news hits the crypto space
Last week, cryptocurrency lending company Celsius froze withdrawals and transfers between accounts. Crypto companies have started laying off employees. A cryptocurrency hedge fund (Three Arrows Capital) got in trouble. With such news, the crypto money industry took a hit this week. U.S. stocks, meanwhile, tumbled the biggest weekly percentage drop in two years amid rising interest rates and fears of a rising recession.
OANDA analyst also drew attention to $20,000
“Breaking $20,000 shows that confidence has collapsed and you are seeing recent stresses for the crypto industry,” said Edward Moya, Senior Market Analyst at OANDA. “Even the crypto cheerleaders at the big rally are quiet now,” Moya said. They are still optimistic in the long run. But they don’t say it’s time to buy at the bottom,” he said. “There are a lot of people who will have scars forever,” Moya said, referring to individual buyers. “But there are still many people who are about to enter the field. There is still interest,” he added.
Jeffrey Gundlach, CEO of DoubleLine Capital, said on Wednesday that he would not be surprised if Bitcoin dropped to $10,000. Others say the deepening decline could force more investors to sell Bitcoin.
Jay Hatfield: Bitcoin could drop below $10,000
“The $20,000 level is an important technical level for Bitcoin and the following drop could trigger further margin calls resulting in forced liquidations,” said Jay Hatfield, chief investment officer at Infrastructure Capital Management in New York.
Bitcoin could drop below the $10,000 level this year once the Fed liquidity bubble fully bursts. It may return to pre-pandemic levels.
The crypto market as a whole is now only a fraction of the size it reached in late 2021, when Bitcoin was trading close to $69,000 and traders were pouring cash into speculative investments of all kinds. As we reported on Kriptokoin.com, the total market cap of cryptocurrencies dropped from $3 trillion in November to nearly $900 billion on Sunday.
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