Bitcoin

Bitcoin Falls Below $20,000 Adding To The Bear Market

Bitcoin falls below $20,000 from $21,544.37. The crypto market continues to fall the exchange rates of top cryptocurrencies. The experts are worried about what more they can expect with this downfall. Bitcoin was once priced at $69,000 setting the bar high. Only traders with great investments were able to spend on this extremely expensive digital currency. Its fall might affect the macroeconomic conditions by speeding up inflation and increasing the interest rate. 

Even in 2017 Bitcoin falls below $20,000 which witnessed extreme lows. But after that, the observers have seen the high returns this currency has given them in the past few years. But when it reached the bear market again every other analyst and trader started whining about its volatility. While some took it as a support level. However, the price fall has impacted the existence of Bitcoin. It flushed out the high returns within one and a half years. This has made it sound like a fool’s theory. Because many investors have stepped back with their funds from this market. But why is this happening right now in the middle of great inflation?

Why Bitcoin Falls Below $20,000?

On the other hand, Federal Reserve has increased the basis point to 75. They are alarmed that they will increase it further if it continues to fall below 20,000 dollars. It is also stated that Bitcoin is just caught up as bait for the financial crisis. This inflation is caused by supply chain imbalances.

The Bureau of Labor Statistics in May 2022 has risen the Customer price Index (CPI) to 8.6% within a year, which means that the prices of goods and services will eventually increase. An increase in CPI first implies food, shelter, and fule. This increased energy resources led to the mining of cryptocurrencies. Since then the index has increased on monthly basis and in the previous month, the index specifically for electricity, increased by about 1.3% rising the expenses of Bitcoin mining. 

Why People Are Concerned If Bitcoin Falls Below $20,000?

The current situation of Bitcoin’s value has grabbed every eye’s attention on the $20,000 limit. Whether or not Bitcoin straddles this line. But why is it so meaningful for investors? Investors are wondering if it is the right time to buy bitcoin?

Most importantly this fall is not only about the psychological support that the investors might get but it is about the fear that investors have from the last bear market that set up this price line. In previous inflation drives, Bitcoin’s price has fallen by about 70% but has never crossed the $20,000 limit.

Now the situation is different because in 2017 it decreased from $69,000 which had a lot of distance but now it is very less and it is more likely to fall beyond. A 10% decrease is a lot to digest for now and many analysts have closely observed the fall pattern of Bitcoin and have concluded their remarks related to this speculative currency. Continue reading to learn more on this.

Opinions On The Value Decrease

Many analysts who have been watching the journey of Bitcoin since 2009 have made a strong opinion on the present condition and future concerns related to this digital currency. Below you can notice that not every analyst thinks the same if Bitcoin falls below $20,000. 

Sam Callahan a well-known Bitcoin analyst has said that based on his observations of Bitcoin’s former bear markets, he has a strong feeling that the price of Bitcoin could drop by about 80% from its highest price because it happened once in December 2018. 

Another analyst Yuya Hasegawa believed that its price would be around $12,000 but soon she added that whatever the price now it is temporary because the currency is more likely to survive this bear market and would jump back to its level. 

In contrast to Yuya’s optimistic view, another analyst Marcus Sotiriou from Global Block exclaimed that if it falls below this price line the firm might have to face some consequences. Like Celsius, a crypto exchange market, which had to stop the withdrawals, others who indulge in Bitcoin and Ethereum will face the same fate. They might witness forced liquidations hence, resulting in further devaluation of Bitcoin.

Conclusion

Bitcoin would go low to $13,800 during this period. If the value continues to fall, the investors would be more concerned about buying for a discounted price and getting benefits when the market gets stable. However, it is predicted that Bitcoin could reach $31,000. But we know that cryptocurrency is a volatile market so anything could happen.