As you may remember, the topic of when Bitcoin (BTC) will reach 100 thousand dollars was popular last year. Some analysts claimed that this would be possible in 2022. However, the leading crypto has been a huge disappointment. Not only has it not risen any higher, but it has moved quite a distance from its peak. What will happen next?
A historic drop for Bitcoin
As you follow on Kriptokoin.com, the second quarter of the year was very bloody for Bitcoin. Cryptocurrency ended the second quarter with a 56% decline. During this period, the price dropped from $45,000 to $19,900. Hence, it experienced its worst quarter since the third quarter of 2011. BTC is currently playing at $20,000, which is an important region.
Bitcoin price daily chart | Source: TradingViewThe leading crypto fell 37% in June. But it’s not just the numbers that are pessimistic. June was also the month in which Bitwise and Grayscale’s spot-based Bitcoin ETF applications were not surprisingly rejected. Next came Grayscale’s promised trial.
Also, the effects of Terraform Lab’s UST stablecoin and Three Arrows Capital collapses seem to have turned into something contagious among crypto firms. Meanwhile, another crypto lender and trading platform Vauld has suspended all withdrawals, trading and deposits. Platform cited the “financial difficulties” of the current market conditions as the reason.
Bitcoin started the second quarter of 2022 at $45,000. However, it has seen below $20,000. However, it managed to recover the key $20,000 price level just in time to close June above it. According to experts, the coin “must break above $20,500 and continue above $22,000 to eliminate potential short-term downside risks.
Overall, the latest Arcane Research weekly report states that this drop “marks a historic quarter for Bitcoin price. “We also have to go back 11 years to find a more brutal quarter,” he says.
Bitcoin price action| Arcane Research Weekly ReportWhat are experts waiting for for BTC?
However, BTC is likely to see more positive times soon. Analyst Michaël van de Poppe says that crypto could soon flip the key level of 20K-20.4K. It also considers that it could then head towards $23K and the summer relief rally. He adds that today crypto is “continuing” and “seems ready for a big move relatively soon.”
As Arcane Research shared, Bitcoin’s $20,000 level marks the top of its last bull run. “Technically speaking, the close of the monthly candle was positive,” the analyst says, with the June closing price above the 2017 high. The report also points to a possible support/resistance shift where “the previous resistance will act as support”.
However, it is possible that there were macroeconomic factors that later reversed the positive expectations. Because global uncertainty continues to increase the pressure. The S&P 500 is down 20% from its January high, which is also reflected in Bitcoin. Deutsche Bank AG Chief Executive Officer Christian Sewing thinks the probability of a global recession is 50%. Other big banks are also predicting this to come. An economic decline of this magnitude is likely to take several quarters.
Bloomberg provided information on the current effects of inflation rates. In this context, he said, “The indicator for the USA is already 12.2%, similar to the levels seen at the beginning of the pandemic and after the 2008 financial crisis.” Anna Wong, chief US economist at Bloomberg Economics, comments:
The risk of a self-fulfilling recession early next year is higher than before. While household and business balance sheets are strong, concerns about the future may cause consumers to withdraw. This is likely to lead to businesses hiring and investing less.
Likewise, the dreaded self-fulfilling recession could paint a grim picture for the crypto market. Because during economic downturns, investors prefer to withdraw from high-risk assets. This, in turn, could lead to panic selling and more gloomy prices.
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