Bitcoin has fallen below $20,000: what now?

The value of the best-known crypto-currency has been falling for several months. On the evening of June 18, bitcoin experienced another fateful drop, below the $20,000 marker. It might not stop there.

What seemed impossible a few months ago has happened: the price of bitcoin fell below $20,000 on Saturday, June 18, 2022. It traded for a few minutes at $17,744, according to data from Coin Market capitalization. An extremely low level that bitcoin had not reached since December 2020.

Bitcoin’s price had been falling for months, but falling below $20,000 in valuation is still bad news, which surprised some investors. Above all, many of them are wondering what will happen now for bitcoin. Will it start to rise again, or could it continue to fall?

What will happen to bitcoin?

The evolution of the bitcoin price is never really due to chance: the price of the asset responds more and more to the same factors as the traditional stock market. Financial analysts have thus created models to predict the future evolution of bitcoin and their work does not bring good news.

Bitcoin has behaved cyclically since its inception: periods of strong increases have always been followed by episodes of equally significant declines. However, these cycles obeyed certain rules. Analysts had thus noticed that, even during periods of decline, bitcoin did not fall below its previous record value.

This behavior could be seen in the 2013/2014 cycle and in November 2017. In the previous cycle, bitcoin hit a new all-time high at $19,497 — a resistance level above which bitcoin should have remained, according to Analyses. But going down to $17,744 on June 18, the crypto-asset temporarily fell out of the pattern, as Coin Desk noted. However, bitcoin has since rebounded: one bitcoin traded on June 20 at around $20,000.

The peak of November 2017 begins to be affected by bitcoin falling in June 2022 // Source: coinmarketcap

A drop to $5,000?

This behavior doesn’t say with certainty that bitcoin will go even lower — but it also doesn’t guarantee that it will stay around $20,000.

Trader and content creator CryptOdin, whom Numerama interviewed, believes bitcoin could hit ancient lows. It indicated two: the price zone occupied between July 2019 and October 202, which was between $11,500 and $14,000, or that between $5,000 and $7,000, which corresponds to the period before the last running of the bulls bitcoin in 2020.

In addition to these predictions, other external factors must also be taken into account, such as the increase in key central bank rates, which may put a damper on the cryptocurrency market, but also the aspect psychological. The continued decline of bitcoin in recent months could cause panic among some investors, who may choose to sell in order to cut their losses and therefore lower the price of the latter even further.

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