Bitcoin is down nearly 30% in the past week. Some experts believe it can still go lower. What happens if Bitcoin falls below $20,000?
The bear market raging on.
We haven’t seen prices plummeting so much since 2020. Bitcoin falls down with enormous speed.
If you are one of those who entered the crypto market in 2020 or 2021, you must be in a state of shock now. Because most of your investments have probably turned into dust by now.
And you are learning to forget the mantra about the crypto that’s always rising.
Bitcoin is already stuck somewhere around $21,000-22,000, sometimes gently touching the $20,000 mark.
But what if Bitcoin falls even further than that?
Bitcoin falls below $20,000, a clear sign of the crypto winter
Bearish sentiment floods financial markets. Experts are weighing in on whether Bitcoin will plunge below the $20,000 mark. And what might happen if it does.
Bitcoin, now firmly in a bear market, is currently trading at just above $22,000, a remarkable fall from its all-time high price of nearly $69,000.
The reasons for that are quite obvious – we all see the worsening macro-economic conditions, such as rising inflation and interest rates.
At the moment, all eyes are on the $20,000 price line.
Not only because it’s a significant psychological level, but also because it represents the peak of Bitcoin’s last bull run in 2017.
Previous bear market
In prior bear markets, Bitcoin has never fallen below the price marked by the previous bull run’s peak. The difference this time, however, is that Bitcoin has a lot less distance to travel to cross that mark.
Swan Bitcoin analyst Sam Callahan believes that, based on experience from previous bear markets, it’s possible that Bitcoin could drop more than 80% from its all-time high, as it did in December 2018 when it fell to just above $3,000.
That would mean Bitcoin falling as low as $13,800 this cycle.
But Callahan also isn’t all that worried if it does.
“It’s important to note that Bitcoin’s investor base is very different and more sophisticated compared to previous bear markets,” Callahan said.
According to him, if Bitcoin dropped below $20,000, we would see substantial buying pressure at those discounted price levels because Bitcoin’s long-term value proposition remains intact.
Yuya Hasegawa, a cryptocurrency market analyst for Japanese crypto exchange Bitbank, shares this sentiment.
He thinks Bitcoin could plunge to as low as $12,200 during this bear market. But now, her outlook is more optimistic.
“I think Bitcoin could go under $20k temporarily but will likely recover the level around it quickly,” Hasegawa told Decrypt via email.
Not everyone is so optimistic.
Marcus Sotiriou, an analyst at UK cryptocurrency firm Global Block, believes there could be more downside if Bitcoin falls below the $20,000 mark. Sotiriou pointed to the controversy surrounding crypto lending company Celsius, the possibility that the company may be insolvent, and the apparent liquidity crisis that forced it to pause all user withdrawals earlier this week.