People were still recovering from the dramatic crypto crash of Terra LUNA and now the drastic fall in Bitcoin seems like a nightmare for many crypto investors. Bitcoin (BTC) is the topmost cryptocurrency in the entire market with high volatility. Since the most popular cryptocurrency in the market has only shed more than 70% of its total value, since hitting its all-time lows, it can only be imagined where the crypto market, as a whole will stand in the upcoming years. On Sunday, the leading cryptocurrency dropped below US$18,000, and the price of top cryptocurrencies declines by as much as 35% last week in the wake of economic recession fears. Bitcoin's price drop is the latest sign of turmoil in the crypto industry amid wider turbulence in financial markets. The majority of crypto investors are selling off riskier assets because central banks are raising interest rates to combat quickening inflation.
You must be highly aware of the fact that the global cryptocurrency market cap has fallen down the US$1 trillion mark. It is unbelievable for crypto investors to experience this drastic crypto crash. After all, Bitcoin going down from US$68k to US$18k is way too much to take for anyone. This is the first time since November 2018 that the Bitcoin reading of the indicator has dropped down the 30 thresholds.
Bitcoin crypto crash happened due to multiple reasons such as the Celsius Network (CEL) took a fall of 70%, the US inflation rate has raised to 8.6% while affecting the economy with a massive sell-off on the weekend, and many more.
It has been speculated that the BTC price will hit US$10k in 2022-2023 as the worst-case scenario for the entire community of crypto investors and tech companies relying on this cryptocurrency for payment transactions. The prediction is that after hitting the rock-bottom level of US$10k, Bitcoin may turn around for a comeback while reaching the US$50k zone.
Cryptocurrency experts have started mentioning that the tightening of Federal Reserve policy — raising the target for the federal funds rate to the range of 1.5% and 1.75%, as well as the shrinking of the balance sheet will create a huge impact on the change in BTC price. The transactions are paused and slowed down for the overflow. Thus, Bitcoin can push forward its price towards the US$10k zone, surpassing the current US$20k price level. Bitcoin crypto crash is experiencing a bear market with the downfall of the global economy. Long-term crypto investors are on the verge of selling their digital currencies, despite incurring a huge loss.
"If #Bitcoin can collapse by 70% from US$69,000 to under US$21,000, it can just as easily fall another 70% down to $6,000. Given the excessive leverage in #crypto, imagine the forced sales that would take place during a sell-off of this magnitude. $3,000 is a more likely price target," tweeted Chief Economist & Global Strategist, Peter Schiff.
Currently, Bitcoin is below US$18K since the global crypto market fell due to the various macroeconomic environment and systematic risks inside the crypto space. BTC fell for 12 straight weeks. The crypto was staged at around US$49K and fell below US$18K. Even though it showed certain signs of bottoming out in mid-May and also during the beginning of April. But investors are extremely worried about the inflation data, which is, in turn, causing them to sell off their crypto investments and are moving towards more traditional and centralized assets.
Given the current macroeconomic environment, and the Federal Reserve tightening the interest rates, crypto investors are afraid that the prices may fall further. Companies that have adopted digital assets are once again preparing for both recession and 'crypto winter', or when the prices further fall or to cope with the fact that the crypto prices have stayed so low for such an extended period. Experts advise investors to check on their asset allocation and are also recommending utilizing Bitcoin for only a smaller part of their investor portfolios.
"In the next 670 days, BTC will capitulate in the next 6 months and hit cycle bottom ($14-21k), then chop around $28-40k in most of 2023 and be at $40k again by next halving," tweeted Venture founder, a contributor at on-chain analytics platform CryptoQuant.
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