Bitcoin has been under intense selling pressure over the weekend. Bitcoin’s price is currently below $25,000, and it is trading at levels last seen in December 2020. The entire market is bleeding, and the global cryptocurrency market cap has fallen below $1 trillion.
Will Bitcoin fall below $20K?
The cryptocurrency market has been in a bearish state since the beginning of the year. However, the bears seem to be intensifying as the market approaches mid-June. The current drop below $25,000 has been attributed to the Celsius network that halted withdrawals, swaps, and transfers because of liquidity issues. The announcement spooked investors that were yet to recover from the Terra crash.
Bitcoin is down, but its losses are not as high as those currently suffered by altcoins. During the weekend, economist Peter Schiff tweeted that Bitcoin’s price was poised to crash to $20,000 and that the entire crypto market cap would fall below $800 billion. He also urged investors not to buy the dip because they would lose more money.
Cryptoassets are a highly volatile unregulated investment product.
Bitcoin has closed twelve consecutive weeks trading in the red zone. It has dropped from around $49,000 in March this year to the current price of around $23,900. The coin had shown signs of bottoming in mid-May, but the inflation metrics released last week spooked the market further.
The consumer price index increased to 8.6% on a year-over-year basis in May, which was below the expectations that it would drop. The data affected stock markets that crashed in tandem with the crypto space.
Before the current downtrend, Bitcoin held strong support at $29,000. However, falling below these levels shows that the coin could test the 20,000 levels. The intense selling pressure has made the Relative Strength Index (RSI) fall below 30. Short-term traders could use this as a sign to buy Bitcoin at the current dip, depending on the technical data.
When to buy
Bitcoin is on a sharp downtrend, and with the global market cap falling below $1 trillion, many investors are spooked, and selling pressure could intensify. However, looking at the charts, Bitcoin seems to be a safe fall compared to other altcoins. For instance, Ethereum is down to $1200, while Solana is down to $27.
The action of large investors converting their small assets to Bitcoin could aid the recovery. However, with the current discussions about Celsius becoming another Terra, the markets could fall further below. Moreover, Celsius sent its assets to the FTX exchange before halting withdrawals. Further losses could be witnessed if these assets are dumped into the market.
Therefore, traders could wait to see if prices will reach $20,000 before they buy Bitcoin. Given all the surrounding negative market factors, a strong price action towards $30,000 could take time before being formed.
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This article was written for Business 2 Community by Ali Raza.
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