CryptoCrash: Learning from the past, next #Bitcoin levels to watch 24.000$, 20.000$ and yes, 14.000$ 😌
Here is why:
Using past crypto #crash episodes as a guide, in a typical bearmarket #Bitcoin falls by around 75-80% from the previous high. That would put us in the $14,000-20,000 range.
Actually: $BTC all-time high is $68,990, the 80% draw-down gravity point is $13,798...just saying, don´t feel bad when we reach the bottom 😬
And a typical crypto winter lasts 2-3 years. Everything has already been there. 🙄
History does not repeat itself but, actually...hmmm, it does:
We can learn a lot from what happened during the last bear market (2018-2019).
Let's take a look at a few things from the past: the market situation, the regulations and the type of investor driving the market, and compare them with what's happening now.
What happened in 2018-2019?
What is a crypto winter? It is a sustained period of low prices and less enthusiasm in the market. Prices retract quite significantly and there is little interest across the markets in any crypto-related situation.
Over the last crypto winter, we saw #Bitcoin going from $20,000 to $3,200. Ethereum from $1,400 to $100. Many new crypto-currencies have been completely swept away. The climax of this bull run ended with the launch of the first bitcoin futures ETF. Traders could now short bitcoin. Many of them already thought it was a bubble. So after the ETF started trading in late 2017, the bears took control. And then it crashed!
With over-leveraged exchanges and fear of regulation, we had the perfect fuel for a market explosion.
There was a boom in initial coin offerings (ICOs) that went nowhere, China put pressure on #Bitcoin miners, #SouthKorea banned crypto-currency exchanges from allowing new accounts to be created.
With low interest rates and juicy stimulus checks, people were more willing to spend money, and some of it ended up in crypto. However, NOW the Fed is taking new steps. It will end the stimulus program sooner than expected and raise interest rates.
What´s definitely clear: that recent crash is not just about the crypto market. Many macro factors are involved, but the fundamentals of crypto have not changed. During the last bull run, investors were mainly average retail traders, now we see more institutional investors with more resources online to manage their portfolios like of monstrous BlackRock, Morgan Stanley, BNY Mellon, J.P. Morgan, Soros Fund Management (with a history of betting against weak currencies) and many others. These are larger investors, who invest for the long term and are more resilient.
However, #blockchain technology can lead to a more liveable world, fair distribution of wealth and strengthen democratic society, as it not only relies on governments but on neutral code which empowers its users!
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We need more #ReturnOnSociety 🦋