What Happens if Bitcoin Falls Below $20,000?
As bearish sentiment floods financial markets, experts are weighing in on whether Bitcoin will plunge below the $20,000 mark—and what might happen if it does.
Bitcoin, now firmly in a bear market, is currently trading at just above $22,000, a remarkable fall from its all-time high price of nearly $69,000—and a drop that most observers attribute to worsening macro-economic conditions, such as rising inflation and interest rates.
At the moment, all eyes are on the $20,000 price line—not only because it’s a significant psychological resistance level, but also because it represents the peak of Bitcoin’s last bull run in 2017.
In prior bear markets, Bitcoin has never fallen below the price marked by the previous bull run’s peak. The difference this time, however, is that Bitcoin has a lot less distance to travel to cross that mark.
Swan Bitcoin Analyst Sam Callahan believes that, based on experience from previous bear markets, it’s possible that Bitcoin could drop more than 80% from its all-time high, as it did in December 2018 when it fell to just above $3,000. That would mean Bitcoin falling as low as $13,800 this cycle.
See related article: Should You Buy Bitcoin Now For Your Investment?
But Callahan also isn’t all that worried if it does.
“It's important to note that Bitcoin's investor base is very different and more sophisticated compared to previous bear markets,” Callahan said. “If Bitcoin dropped below $20,000, I think we would see substantial buying pressure at those discounted price levels because Bitcoin's long-term value proposition remains intact.”
Last month, Hasegawa told Decrypt that Bitcoin could plunge to as low as $12,200 during this bear market. But now, her outlook is more optimistic.
“I think Bitcoin could go under $20k temporarily but will likely recover the level around it quickly,” Hasegawa told Decrypt via email.
Not everyone is so optimistic.
Marcus Sotiriou, an analyst at UK cryptocurrency firm Global Block, believes there could be more downside if Bitcoin falls below the $20,000 mark. Sotiriou pointed to the controversy surrounding crypto lending company Celsius, the possibility that the company may be insolvent, and the apparent liquidity crisis that forced it to pause all user withdrawals earlier this week.