Bitcoin Back At $21K After 75% Drop, Where Does It Go From Here?
June 21 2022 - 9:06AM
NEWSBTC
Bitcoin is experiencing price relief in lower timeframes after the
crypto market crashed to its 2020 levels. This pushed the
cryptocurrency to a yearly low of $17,500, a 75% drop from its
all-time high, and Ethereum to $870 an 82% drop from its all-time
high. Related Reading | TA: Ethereum Could Rally If The Bulls
Clear This Key Resistance This number is standard for a crypto bear
market, Bitcoin is known for experiencing similar crashes in the
past and could possibly suggest it has completed a new market
cycle. At the time of writing, Bitcoin trades at $21,300 with a 4%
profit in the past 24 hours. In a market update, trading desk QCP
Capital provided potential scenarios for Bitcoin as it recovers
from a crash. The firm expects a potential continuation for BTC’s
price as it makes it climbs its way to previous levels. Despite the
downside trend, QCP Capital claims BTC’s price saw a positive
reaction from the lows as it quickly managed to get above $20,000.
In that sense, they believe the selling pressure that took BTC to
$17,000 was “less leveraged liquidations and more miners reducing
inventory”. Liquidation from leveraged positions often leads to
price consolidation as the assets take time to recover. In other
words, BTC’s price is likely to continue up and less likely to stay
in a specific price area, as it did in the past month when it was
stuck at $28,600 and $31,500. In addition, QCP Capital believes the
options market is hinting at less downside fear. Institutions are
“stating to put on bullish structures in size”, the trading firm
claimed while adding the following: Macro factors are also lending
short-term support. Oil prices have dropped from above 123 to below
110. Other commodities have followed suit as well. This is
significant as it reduces inflationary pressure, allowing the Fed
to ease up on their tightening stance. A big positive for markets
all round. Time To Buy The Bitcoin Dip? As NewsBTC reported, a
decline in the price of commodities could suggest the U.S. Federal
Reserve (FED) and its monetary policy are making an impact across
global markets. Thus, reducing inflation and giving Bitcoin and
other risk-on assets some breathing room, at least, for the short
term. Related Reading | TA: Bitcoin Consolidates Near Key
Juncture, Can The Bulls Make It After a 75% crash, Bitcoin is
usually at attractive levels to increase long-term holding.
However, investors should operate with caution and apply a
dollar-cost average (DCA) strategy. In that sense, QCP Capital
added: we remain on guard. Quarter-end fund redemptions are likely
to put some pressure on prices along with the possibility of more
crypto insolvencies being unearthed.
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