Good morning crypto enthusiasts!
As many of you may have noticed in our Discord Community† Yesterday was a really good day for bitcoin adoption with companies like Twitter and Vueling looking to do something with bitcoin. Twitter wants to ensure that users can use bitcoin for everyday payments, while Vueling wants to accept bitcoin payment. This good news, which ensures that bitcoin can be used in more places again, seems to have had quite an effect on the price at the moment.
BTC may still have a while to go
The market has cooled down a bit at the moment. The hard decline of the past week seems to have dried up for the time being and we can breathe again. Now, of course, is the perfect time for an investor to think about what your plan is.
In order to determine a possible plan, we must of course take a number of things into account. An important question we need to ask ourselves is: “has bitcoin bottomed out yet?” Although we can never determine this with certainty, we can get an idea by looking in history.
Although investors often tend to look at when bitcoin will rise again, it is also good to think about what will happen if the price falls.
That we’re in a serious bear market sitting is no longer a secret. So one of the things we can do is look at the previous serious bear markets or steep declines.
There are a number of moments that immediately come to mind when you start thinking about declines. The two crashes from 2013, the crash after the $20,000 of 2017 and the infamous corona crash. These crashes are visualized in the graph below.
Each of these crashes gave us a drop of between 72% to 86%. If we compare these results with the current decline, we see that this bear market is not too bad for the time being. Well, we know that history doesn’t repeat itself, but it often rhymes.
If, in percentage terms, we fall as far as the crash of late 2013, early 2014, that would mean that bitcoin could even reach $9,500.
To push the price down, of course, we need investors who sell their bitcoin. Well, we’ve seen these come by lately. The first group that may want to sell its BTC is the miners.
From info from CryptoQuant turns out that miners are withdrawing their bitcoin reserve. The bitcoins are sent from the wallet of these miners. Well, this is often a sign that the miners themselves want to take some profit from the coins that they have mined themselves. If they start sending bitcoin to exchanges in large numbers, it could potentially put pressure on the sell side.
A second indicator that there may be additional pressure on the sell side of bitcoin is the increase in the number of general deposits on exchanges. We recently saw this number rise sharply, even to a level that we have not seen since November 2018.
The fact that investors send their coins from their wallet to an exchange in most cases means that they intend to sell it. With both miners and other investors looking to sell their coins, this could well cause a price drop, so we may eventually see that +80% drop for bitcoin.
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