Will Bitcoin Fall to $13,800? — What an 80% Drawdown Will Look Like From Here
On Monday, June 15, 2022, the price of bitcoin tapped a low not seen since mid-December 2020 as the price hit $20,080 per unit. A large number of crypto supporters are debating whether or not the drop is the market’s bottom or if the fall could lead to deeper losses. At the time of writing, bitcoin is 70% down from the $69K all-time high (ATH) but traditionally, bitcoin is known to drop around 80% or more from ATHs recorded in the past. Will Bitcoin Slide More Than 80% Down This Time Around?
The crypto economy has had a rough couple of weeks as the leading crypto asset bitcoin (BTC) shed 35% over the last 14 days. Speculators have gone from guessing whether or not it might be a bear market to saying it definitely is a bear market.
During the past few days, there’s been a lot of capitulation and on Monday, hundreds of thousands of crypto traders were liquidated for close to $1.30 billion. Two days later, bitcoin dropped to a low of $20,080 per BTC and the last time BTC traded at this price was 17 months ago in mid-December 2020.
At current USD values, bitcoin is down 70% from the $69K ATH it hit on November 10, 2021. During the bull runs in 2013 and 2017, bitcoin (BTC) dropped more than 80% lower than its previous price peaks. Coingecko.com’s founder, Bobby Ong, tweeted about bitcoin’s falls from the past bull runs and he included ethereum (ETH) in the 2017 runup.
For instance, after BTC’s price high in 2013 of around $1,127 per unit, by 2015 BTC was down 82% at $200 per coin. Ong’s tweet shows that In 2017, BTC jumped to $19,423 per unit but by 2018, the price dropped to a low of $3,217, which was 83% lower than the price high.
The Coingecko co-founder explained that ethereum dropped 94% during the 2017-2018 price cycle. Ong’s tweet was published on June 11, 2022, and at that time, BTC’s USD value was 59% lower than the ATH, and ETH’s value was 69% lower. At the time of writing, ETH’s dollar value is 75.4% lower than the crypto asset’s all-time price high ($4,815) reached on November 10, 2021. Let"s do some math.
With a potential bottom for $BTC at $12,000 and a potential bottom for the ETH/BTC pair at 0.03, this would mean ETH would eventually reach $360.#Bitcoin #Ethereum #bearmarket $ETHBTC
— Colin Talks Crypto – CBBI.info (@ColinTCrypto) June 15, 2022
Of course, there’s a lot of speculation and theories about whether or not BTC’s price will go lower from here. An 80% drawdown from BTC’s ATH in 2021, would be roughly $13,800 per unit. If ethereum saw a 90% fall from the ATH last year, then the USD value would be around $488 per ether. Some speculators predict BTC could hit $12K per unit and ETH could tap $360 per unit. A Drop Beneath $19K Wipes Out Pre-Halving Price Highs, Bitcoin Miners Struggle, Macroeconomic Disasters Continue to Shake Global Markets
So far, since the crypto economy’s ATH last year, more than $2 trillion in value has left the crypto ecosystem. Traders are also concerned about the next halving, as prices will need to be much higher when miners only get 3.125 BTC per block found. A fall below $19K per BTC will erase the previous pre-halving price highs. Furthermore, using current BTC exchange rates and $0.12 per kilowatt-hour (kWh), only seven ASIC mining rigs are seeing steady profits. Bitcoin hashrate on June 15, 2022. At $0.12 per kilowatt hour, only seven ASIC mining machines are profitable using today’s BTC exchange rates.
Bitmain’s Antminer S19 XP with 140 terahash per second (TH/s), using the same electricity cost of $0.12 per kWh, gets an estimated $3.49 per day in profit. The Microbt Whatsminer M50S with 126 TH/s gets an estimated $1.51 per day in BTC profits using the same electrical costs. At $0.12 per kWh, machines producing 84 TH/s are not profitable, unless they get cheaper electrical resources.
All of these signs and the thousands of crypto employees laid off during the last few weeks arguably show this is definitely a bear market. The question remains on whether or not the 80%+ drawdown will take place this cycle and how long the bear run will last.
There’s also the macroeconomic disasters and concerns over rising inflation, central banks’ hiking rates, and the ongoing war between Ukraine and Russia. Bitcoin steadily rose to its ATH while Americans and citizens from other countries received stimulus payments. While bitcoin and the crypto markets never experienced a Covid-19 lockdown economy before, the crypto economy has never been tested under current circumstances, either. Tags in this story All time high, ASIC miners, ATH, Bear Market, Bears, below the ATHs, Bitcoin, Bitcoin (BTC), Bitcoin Price, Bobby Ong, bottom, bottoms, Coingecko Co-founder, crypto bottoms, Crypto markets, Crypto Prices, Ethereum (ETH), Fall, Halving, Hashrate, macroeconomic disasters, Miners, pre-halving cycle, price cycles
What do you think about bitcoin’s current price cycle? Do you expect an 80% drawdown from the ATH last year? Let us know what you think about this subject in the comments section below. Jamie Redman
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today. PWC: Majority of Crypto Fund Managers Surveyed Predict Bitcoin Could Reach $100K by Year-End MARKETS AND PRICES | 2 days ago Skybridge Founder Advises How to Survive Crypto Bear Market — "We Are in a Bloodbath" MARKETS AND PRICES | 2 days ago
Image Credits: Shutterstock, Pixabay, Wiki Commons, Feature Illustration Contributor Vlastas, Chart by Venture Capitalist Datastream, Previous articleBitcoin, Ethereum Technical Analysis: ETH, BTC Remain Lower Ahead of Federal Reserve Rate Decision Next articleBiggest Movers: MATIC Slides to 1-Year Low as LINK Rebounds Following Losses Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItFidelity Investments Launches Crypto, Metaverse ETFs — Says "We Continue to See Demand"
Fidelity Investments, one of the largest financial services firms with more than $11 trillion under administration, is launching exchange-traded funds (ETFs) focusing on the crypto ecosystem and the metaverse. "We continue to see demand, particularly from young investors, for access ... read more.Bitcoin ATM Operator Indicted in New York Allegedly Running Illegal Business Attracting Criminals Bill ‘On Digital Currency’ Caps Crypto Investments for Russians, Opens Door for Payments UAE Airliner Emirates to Launch NFTs and Experiences in the Metaverse Survey: Adoption in Argentina Grows, With 12 out of 100 Adults Having Invested in Crypto