Bitcoin recently experienced another significant crash in 2022 and went below US$20,000 per unit in June. There is a possibility that Bitcoin price may drop by 50% to US$10,000 if it cannot adapt to the current market condition.
June this year was tough as Bitcoin saw a major drop up to 40%. The last time it experienced such a drop was in September 2011. Just in 2021, the price for Bitcoin was US$68,000 per unit. This is not the first fall that the cryptocurrency had experienced.
Bitcoin needs to reach break point
In the last two months, the crypto market has experienced a few setbacks. There are many cases of unstable lenders and failed crypto projects. Voyager Digital and Terra are on the list of crypto companies that recently announced failures.
The crypto market has lost about US$2 trillion in investors’ funds. The news made the crypto community push for government oversight in the crypto market. Tighter regulations may control the rapid decline, not only in Bitcoin but also in other crypto products.
For now, the crypto community is split between trusting the Bitcoin system and worrying about the continuation of the bear market. MLIV Pulse did a survey to 950 crypto investors and found that 60% of the respondents believed Bitcoin value would decline to US$10,000. The rest thought that the value would go up to US$30,000 per unit before getting to another low point.
According to DonAlt, a crypto analyst on Twitter, Bitcoin’s break point would be at US$22,000. The analyst wrote “$22,000 is still where dreams are made. We either fail spectacularly there or bask in glory. There are honestly good bull and bear arguments to be made here. I still enjoy being bullishly positioned more though”.
Do you think #Bitcoin will still be the dominant currency in 10 years to come? 👀— CoinMarketCap (@CoinMarketCap) July 11, 2022
The US$30,000 mark might be a resistant spot for Bitcoin. At that level, the market might be more stable. In previous bear markets, a mean reversion like this had happened. Regardless, a rally to increase Bitcoin’s value is due.
Bitcoin’s bear market history
During its infancy period, its value had a continuous decline, particularly in 2011. A successful rally managed to boost Bitcoin’s value to US$32 per unit on June 8, 2011. In a few days, the price declined by 99%. At that time, there was a security breach at a cryptocurrency exchange that caused 850,000 units lost in the Bitcoin system.
Bitcoin entered another bear market period after it hit US$1,000 per unit in November 2013. In December 2013, the value declined by 30% or equal to US$700 per unit. This time, China’s central bank’s ban on local Bitcoin transactions was the main contributor to this drop. Its per-unit price was at US$360 in April 2014 and later dropped to US$$170 in January 2015.
The latest bear market before this one happened in 2018. People dubbed this period as “crypto winter”. Bitcoin had reached its historic peak with a US$20,000 price per unit in late 2017 but crashed down to US$3,200 by the end of 2018. This time, the bear market happened due to a similar reason as the first one, a security issue at an exchange.