As global economic conditions worsen, the crypto market is experiencing heightened volatility. This is despite rising inflation and high interest rates.
Many crypto investors believe that Bitcoin (BTC), due to the market headwinds, could fall as low as $10,000 before a bottom is reached.
BTC/USDT 1-day chart. Source: TradingView
Many traders laughed at the thought of Bitcoin falling below its 2017 high. However, the recent drop to $17,600 shows that this bear market could be different than the one before it.
Here are the views of several analysts on the possibility that Bitcoin will fall to $10,000 within the next few days.
Historical pullbacks indicate a low of $10,350
You can get insight into the performance of Bitcoin in the short-term by looking at how it performed during bear market cycles 2013 and 2017. The maximum drawdown Bitcoin experienced in 2013 was 85%. This occurred over a period 407 days. In 2017, the maximum drawdown was 84%, which lasted 364 days.
Historical drawdowns of Bitcoin. Source: Arcane Research
Arcane Research recently reported that the current drawdown is ongoing for 229 days, and has so far seen a maximum drawdown at 73%.
Arcane Research stated,
If Bitcoin follows these cycles, the bottom should be reached sometime in late Q4 2022 at a price of $10,350.
There is always the possibility of a pullback at 85%, but Arcane Research also pointed out that Bitcoin is more intertwined with other financial markets. The Fed, US elections and crypto regulations all have an impact on its performance.
Delphi Digital, a cryptocurrency research firm, posted this chart showing that the “next place we should be looking at from a high-timeframe market structure perspective is $10K-12K.”
Brave new coin index (BLX), 1-month chart Source: Delphi Digital
The chart shows that the market structure support for high-timeframes is expected to be between $9,500 & $13,500.
Delphi Digital said,
“Coincidentally this area aligns with the implied low, if BTC experiences a 85% drawdown between peak and trough.”
Is $10,000 a good place to start long?
Analysts are not all going to expect a $10,000 drop. Will Clemente, Blockware Solutions, is an example. Clemente says that Bitcoin’s current range is a good spot to accumulate.
Right now, Bitcoin is extremely cheap. It is currently trading at a price that is below its 200-day trend, and its average cost basis of 3% of its entire existence. pic.twitter.com/kW6BysdkQ0
— Will Clemente (@WClementeIII), June 27, 2022
Glassnode also shows that Bitcoin’s 200-week moving mean, balance price, and delta price in its bear markets floor model are consistent with the 0.6 Mayer Multiplemetric Clemente analyzed.
Bitcoin bear market floor models. Source: Glassnode
“Only 13 of the 4,360 trading days (0.2%) have ever experienced similar circumstances. These were only two previous events: Jan 2015 and March 2020. These points are highlighted in green on the chart.
The potential low price for Bitcoin is $15,750 based on the Delta price metric, which has not changed.
Related: Bitcoin’s short term price prospects have slightly improved, but traders remain cautious.
BTC/USD 1-month chart. Source: Twitter
John Bollinger, creator of Bollinger Bands trading indicators, suggested that Bitcoin prices may have reached their bottom.
Picture perfect double (M-type), top in BTCUSD on monthly chart with confirmation by BandWidth. %b leads you to a tag for the lower Bollinger Band. Although there is no sign of one, this would be an ideal place to insert a bottom. You should do your research before making any investment or trading decision.
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