Bitcoin (BTC) gave up the $20,000 support. Thus, it reached a bear market on June 18 for the first time since 2020. BTC price slumped below its former all-time high. Here are the details…
Bitcoin price drops below $20,000
Data confirms that BTC/USD has dropped below $20,000 for the first time since December 2020. The nerves rose after the US Federal Reserve’s (FED) comments on the inflation outlook. Meanwhile, crypto markets have borne the brunt of a sell-off that began after shocking Consumer Price Index (CPI) numbers last week.
Losing the psychologically important $20,000 mark, Bitcoin also experienced a “first”. For the first time in its history, it has dropped below the high of the previous halving cycle. It also risks making history by closing below the 200-week moving average. Bitcoin has experienced this situation only five times before. According to recent calculations, Bitcoin’s 200-week moving average is around $21,700. Michael van de Poppe said the 200-week moving average structure appears to be in a “disruptive market.”
What levels are next?
Crypto markets tumbled earlier last month when big coins fell in correlation with the stock market. Within a week, Terra’s stablecoin UST and native token LUNA both exploded. It erased nearly $40 billion worth of value. The combination of macro and micro events may have brought Bitcoin down. So, what levels are next? What can analysts expect?
Analysts point to $18,000 for the next level of support. In terms of the next “bottom level,” expectations are at $15,500. Renowned analyst Rekt Capital has analyzed BTC’s weekly moving averages and identified the next low at $19,000 or $15,500. Meanwhile, Leigh Drogen, general partner and CIO of Texas-based digital assets quantitative hedge fund Starkiller Capital, has been wary of crypto markets since earlier this year. The level predicted for Bitcoin’s trajectory is quite scary. Drogen claims that the BTC price is likely to drop to $10,000.
Altcoins are also in the red
Currently, Ethereum is staying above the $1,000 support level, albeit partially. It is currently trading around $1,020. The combined market capitalization of all cryptocurrencies currently stands at around $853 billion, down over 5% in the last 24 hours. Since the LUNA collapse, cryptocurrencies have plummeted as investors withdraw millions of dollars from DeFi amid fears of a worsening bear market.
Earlier in the week, Celsius paused all customer withdrawals, citing concerns that the firm would have insufficient funds to cover a transaction on the platform resulting from selling its cryptocurrency stETH in exchange for ETH. In addition, experts pointed out the liquidity problems in the Three Arrows Capital (3AC) mutual fund.
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