Analysis: It's 'foolish' to say Bitcoin can't drop below $10K

Analysts continue to target $16,000 as a downside target, so investors must have a contingency plan in place.

On June 23, Bitcoin (BTC) saved $20,000 for another day, with calls for another 20% drop still circulating.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Bitcoin under $10,000 is not unattainable.

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD fluctuating just above $20,000 in the 24 hours leading up to the time of writing.

As usual, the behavior mirrored movements in the US equity markets, which remained flat on the day.

Federal Reserve Chair Jerome Powell's remarks provided only brief volatility. Powell's congressional testimony, according to Cointelegraph, provided no new information on macroeconomic policy.

As a result, crypto commentators stuck to previous assertions: the outlook was uncertain, but a potential new drawdown might only involve a trip to $16,000.

"$BTC is consolidating in a broad range and then rising. MDD (maximum drawdown) is not as large as -20 p "Ki Young Ju, CEO of on-chain analytics platform CryptoQuant, wrote in part on Twitter.

Ki retweeted analysis from popular account Il Capo of Crypto, whose BTC forecasts have long predicted price declines.

Ki claimed in a separate post that "most Bitcoin cyclic indicators are saying the bottom" is in, and that shorting BTC at current levels is therefore risky.

"I'm not sure how long it would take for this range to consolidate. Opening a large short position here does not seem like a good idea unless you believe $BTC will fall to zero "He wrote something.

However, there was reason to be more risk averse when monitoring resource Material Indicators.

"At this point, nobody can say with certainty whether BTC will hold this range or if it will ever return to sub-$10,000 price levels, but it would be foolish not to plan for that possibility," a tweet argued.

"'Never' doesn't age well in crypto. Plan accordingly."

The Fed has no plans to "de-COVID" its balance sheet.

In new macro news, rising natural gas prices on a dwindling supply outlook put additional pressure on the Eurozone.

Meanwhile, Powell made new comments about the Fed's monetary tightening policy in the United States.

According to media reports at the time of writing, the central bank's balance sheet reduction now only planned to shave up to $3 trillion off its near $9 trillion in asset purchases.

Since February 2020, the Fed's balance sheet has grown by $4.8 trillion, implying that even after the reductions, it will be larger than it was before the pandemic.

Federal Reserve balance sheet chart (screenshot). Source: Federal Reserve
Federal Reserve balance sheet chart (screenshot). Source: Federal Reserve

Meanwhile, despite rampant inflation, the European Central Bank's balance sheet reached new all-time highs this week.

** Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of USA GAG nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

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