On Saturday, the Bitcoin price fell below $20,000 for the first time since December 16, 2022. The intraday trading continued to accelerate the sell-off, which saw prices fall to trade below $17,600. However, Saturday’s trading session would recover in the late hours, which pushed the prices to close at $18,956.
Saturday’s close provided a perfect setup to continue a strong bullish move yesterday. The prices rose by 8 per cent, closing the markets at $20,064. In today’s trading session, the early hours of intraday trading have been aggressively bearish, with prices falling by 2 per cent.
Why is Bitcoin Dropping?
The year-to-date data shows that Bitcoin has fallen by 56 per cent, with much of the loss coming in the last three months. In June, Bitcoin prices have dropped by 36 per cent, extending the previous two months’ aggressive bearish move that saw prices fall by 15 per cent in May and 17 per cent in April.
The aggressive bearish trend in June is the latest sign of turmoil in the cryptocurrency market that has partly been contributed by turbulence in financial markets, increasing interest rates, inflation, and economic uncertainty spurred by the war in Ukraine.
The current Bitcoin fall was also fueled by recent events that included the fall of Terra Luna and the USDT stable coin, resulting in billions of dollars in losses. This month, the announcement by Celsius that they would be pausing withdrawals from their platform also did not augur well with investors.
The news about layoffs by major cryptocurrency companies also did not help quell the tension in the cryptocurrency market. Coinbase Global Inc, Gemini and Blockfi all indicated they would be laying off thousands of employees., These platforms, being some of the biggest in the cryptocurrency industry, may also have contributed to the fall as investors started sensing a problem with the industry and ditched their cryptocurrency investments.
Bitcoin Price Prediction
Much of what will happen in the markets for the next few trading sessions will be majorly fueled by the current news cycle. With rising inflation and an already nervous investors base, there is a high likelihood that we will be seeing Bitcoin prices continue to fall in the next few trading sessions.
There are also fears of a recession that have pushed most investors on edge, and resulted in the sell-off of risky investments such as Bitcoin. If such sentiments continue to persist in the markets, then there is a high likelihood that we will see Bitcoin trading below the $15,000 price level.
However, improvement in the current global economic outlook will invalidate my bearish analysis. It will also mean a possible Bitcoin recovery.