Bitcoin’s decline below $20,000 proves that the bottom is not in
Bitcoin was pegged above $20,000 for the past week, and its ability to hold above that level through the FOMC announcement had led to speculation that the digital asset had finally bottomed. However, recent developments and bitcoin’s fall below $20,000 have proven that this is not the case. Even more, it points to a further decline in the market that could drag the cryptocurrency to even lower lows.
The bottom is not in
Bitcoin is now trading at $19,000 which has completely destroyed the expectation that the bottom was already marked at $20,000. Despite the digital asset largely diverging from many established trends, it appears to be continuing to hold true to the fact that it will eventually lose more than 80% of its all-time high value before the next bull rally begins .
If so, it is possible that the market will see lows below $17,000. Now the question becomes what will trigger such a price drop, and it can easily be traced back to the ongoing battle between Binance and FTX.
The market is already feeling the effects of Binance looking to dump more than $500 worth of FTT, which has already triggered a more than 30% drop in the token’s price. But as is often the case in the crypto market, it is not localized to just FTT alone. The effects are being felt across other cryptocurrencies such as bitcoin which has lost around $1,000 from its value in the last 24 hours alone.
BTC price falls below $20,000 | Source: BTCUSD on TradingView.com
Will Bitcoin Recover?
A rise in the price of bitcoin is not a debate given that recovery after a price decline is always inevitable. However, a significant recovery from this point is not expected given that bitcoin has yet to bottom. And until this happens, it is likely that bitcoin will not break above $22,000.
There was also considerable selling in the market after the price increase last week. Investors had taken advantage of this to secure some quick short-term gains, but the result was a loss of support of $20,000.
For bitcoin, it comes down to the current macro climate due to the high correlation. Until there is settlement, it is likely that the digital asset will not see any significant value pump. The disruption from the macro environment and the ongoing issues with Binance and FTX point to further downside for bitcoin.
Featured image from Analytics Insight, chart from TradingView.com
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