On Monday, June 15, 2022, the price of bitcoin hit a low not seen since mid-December 2020, when the price hit $20,080 per unit. A large number of crypto proponents argue over whether a drop is a market bottom or if a drop could lead to deeper losses. At the time of writing, Bitcoin is 70% below its all-time high of $69K (ATH), but Bitcoin has traditionally been known to drop by about 80% or more compared to ATHs recorded in the past.
Will bitcoin drop over 80% this time?
The crypto economy has had a rough couple of weeks as Bitcoin’s leading crypto asset (BTC) lost 35% in the last 14 days. Speculators have gone from speculating whether this could be a bear market to saying that it is definitely a bear market.
There have been many capitulations over the past few days, and on Monday, hundreds of thousands of crypto traders were liquidated for almost $1.30 billion. Two days later, bitcoin dropped to a low of $20,080 apiece. BTC and the last time BTC at this price it was 17 months ago in mid-December 2020.
At current USD values, Bitcoin is down 70% from the $69,000 hit on November 10, 2021. During the bull run in 2013 and 2017, bitcoinBTC) fell more than 80% below its previous price peaks. Coingecko.com founder Bobby Ong, tweeted about bitcoin’s downfall due to past bull runs and he turned on ethereum (Ethereum) ahead of 2017.
For example, after BTCthe price in 2013 was about $1127 per unit, by 2015 BTC fell 82% to $200 per coin. Ong’s tweet shows that in 2017 BTC jumped to $19,423 per unit, but by 2018, the price had dropped to a low of $3,217, 83% below the price high.
The co-founder of Coingecko explained that Ethereum fell 94% during the 2017-2018 price cycle. Ong’s tweet was published on June 11, 2022, and at that time BTCthe value of the US dollar was 59% lower than the ATH, and Ethereumthe value was 69% lower. At the time of writing, Ethereumthe dollar value is 75.4% below the all-time high of the price of the crypto asset ($4,815) reached on November 10, 2021.
Let’s do the math.
— Colin talks about crypto — CBBI.info (@ColinTCrypto) June 15, 2022
Of course, there are many assumptions and theories about BTChence the price will go down. Drawdown 80% of BTCATH in 2021 will be approximately $13,800 per unit. If Ethereum were to drop 90% from ATH last year, then the USD value of Ether would be around $488 per Ether. Some speculators predict BTC can reach 12 thousand dollars per unit and Ethereum can touch 360 dollars per unit.
Drop below $19k erases pre-halving price highs, bitcoin miners struggle, macroeconomic disasters continue to rock global markets
So far, since the ATH of the crypto economy last year, more than $2 trillion has left the crypto ecosystem. Traders also concerned about the next halving as prices should be much higher when miners only get 3,125 BTC for the found block. Falling below $19K for BTC erase previous price highs before the halving. In addition, using the current BTC exchange rate and $0.12 per kilowatt hour (kWh), only seven ASIC mining rigs are making consistent profits.
Antminer S19 XP from Bitmain with a performance of 140 terahashes per second (TH/s) at the same cost of electricity of $0.12 per kWh makes about $3.49 in profit per day. Microbt Whatsminer M50S with a performance of 126 TH / s gets about $ 1.51 per day in BTC profit for the same energy costs. At $0.12/kWh, machines producing 84 TH/s are not profitable unless they get cheaper electrical inputs.
All of these signs and the thousands of crypto employees laid off over the past few weeks may indicate that this is definitely a bear market. The question remains whether an 80%+ drawdown will occur in this cycle and how long the bear run will last.
There are also macroeconomic disasters and worries about rising inflation, higher rates by central banks, and the ongoing war between Ukraine and Russia. Bitcoin rose steadily to its ATH while Americans and citizens of other countries received stimulus payments. While bitcoin and crypto markets have never faced a closed economy due to Covid-19 before, the crypto economy has never been tested under the current circumstances.
What do you think of the current Bitcoin price cycle? Do you expect an 80% drawdown compared to ATH last year? Let us know what you think about it in the comments section below.
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Credit : news.bitcoin.com