The possibility exists, but not without first considering a series of socio-economic factors on a macro and micro scale.
According to analysts, bitcoin, currently valued at around $21,000, could plummet as low as $10,000!
Is this a real possibility? What motivated this bold statement in the current moment of BTC?
More bearish than bullish
Although we cannot rule out a positive change, the highest probability pointed out by many more cautious analysts is that of a drop in the value of bitcoin. This unpredictability is nothing different from the volatility patterns we often see in the cryptocurrency market.
It is not now that this worrying region has been considered. The possibility of bitcoin reaching $10,000, or at least close to that value, has been considered at least since the coin started falling from its all-time high of $68,000, hitting 17k as recently as June.
After this worrying low, BTC has been making a rapid recovery, perhaps even too quickly, reaching close to 25,000 after just a few weeks. The wave of optimism that motivates this growth is surprising at times, when declines were expected and we ended up seeing shots in the opposite direction.
The speed with which bitcoin distanced itself positively was always a strong indication that the good phase would not last. We should see the coin look for some support zones below $23k, and it would come as no surprise to see it make a correction below 20k given the political, social and economic context we are experiencing.
Another constant in most cryptocurrency moment analyzes is the correlation factor between the digital asset market and other global socioeconomic sectors. The macroeconomic crisis that major powers, such as the United States and China, are going through in several sectors, affects the most traditional economic ecosystems too much.
Events like interest rate hikes to curb inflation, wars and, of course, the pandemic invariably drive people to take their money out of volatile investments and into safer options like fixed income. As a result, amounts placed in risky assets are drained, and these consequences apply globally.
If we experience even more crises, such as the imminent real estate collapse that threatens China, bitcoin will certainly feel the effects of these events. Of course, we must also always take into account news that favors the market, such as BlackRock’s involvement with the partnership with Coinbase and the Bitcoin Trust fund.
To reiterate: the BTC scenario is mostly pessimistic, but there is always an unpredictability, which we can even observe in the still-awaited outcome of the Mt. Gox, which, depending on the destination given to the “holded” amount, can influence either side. The impact may not even be significant, as we are in a macro downturn scenario.
The market cycles
Finally, we need to consider a few more important aspects of the market to first analyze whether there is a possibility of bitcoin reaching $ 10,000, and if there is, what is the real probability of this happening.
One such aspect is the cyclical nature of the currency ecosystem. Analyzing both the monthly and annual patterns of bitcoin, it is possible to conclude not only that it will experience a decline in September, but also that it will close the year 2022 on a low note.
It is also crucial to note the predominance of a greater strength of BTC sellers in favor of buyers. Even the big token wallet holders are not buying, but selling. The number of whales on the market is plummeting.
All this, therefore, points to the maintenance of a non-optimistic sentiment towards bitcoin. The frightening speculative value of $10k may not even be a reality, but it is plausible to expect that the 20k support will not hold.
Of course, this also depends on possible mass institutional action, with companies like BlackRock catapulting the value of the entire crypto market with large investments and buying BTC in large quantities, so we can only watch with the usual caution.
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