Over the past few days, the price of Bitcoin initially saw an increase and then quickly experienced a steeper decline. But in the near future, the risk of a new low in 2022 is extremely high. But there is even evidence that we could see Bitcoin crashing down to $10,000. What are the signs of such a crash?
How has the price of Bitcoin evolved in recent months?
Bitcoin price saw heavy losses in 2022. In November 2021, Bitcoin was still at an all-time high of over US$68,000. Over the past few months, bitcoin then lost around 75% of its value, leading to a prolonged crash in 2022.
Since the start of 2022, the loss has been around 65%. We saw most of the losses in the first half of 2022, when Bitcoin price fell below $18,000 in mid-June. This mid-June crash was long the lowest point for Bitcoin price in 2022. It wasn’t until the FTX crash in early November that Bitcoin was able to drop lower and saw a drop below the $20,000 mark.
Why did Bitcoin crash in 2022?
There was a combination of reasonswho crushed Bitcoin in 2022:
- Natural bear market correction: Bitcoin moves in typical cycles, which are determined by the halving. In 2021 we saw the peak of the bull market, in 2022 the start of the bear market. In this last phase, heavy casualties are now considered normal.
- General economic situation: The year 2022 has seen an inflationary crisis triggered by easy money policies. With the necessary increases in interest rates by the US Federal Reserve, riskier investments such as cryptocurrencies are becoming less profitable.
- loss of trustworthy : The bankruptcy of FTX, in particular, reduced confidence in the crypto market again, leading to a stronger Bitcoin crash.
Why might Bitcoin see a crash to $10,000?
Bitcoin’s crash to US$10,000 has been talked about as a bearish scenario for weeks and months. Currently, many factors could make this possible:
- Due to the FTX crash, confidence in crypto exchanges and other crypto projects is low.
- Binance has been criticized for failing to audit its financial condition.
- Key rates were raised again.
- Bitcoin price was only able to break through the resistance at $17,000 for a short time, but soon fell back. This could trigger a bitcoin crash.
The danger of a fall towards $10,000 is therefore particularly high in the coming weeks. But in the medium term, the trend reversal should already occur in 2023.
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