Bitcoin has been playing it relatively safe in the face of widespread investor skepticism, volatile markets, and other minor disturbances. The asset recently formed a double top as it consolidated below $16,800- an extremely bearish reversal formation, thus causing heightened stress and panic amid the trading community.
From $16,791 it has been declining gradually below $16,500 and $16,400. The bears pushed the price below the 23.6% Fib retracement line of $15,470 swing low to $16,790 high. However, the entire crypto market cap slid over 2% to $815.32 billion on November 27, steering key altcoins into the negative.
BTC has already caused investors massive losses- up to 77%! How much worse can the situation get?
Tremors From China Unrest Spook Global Markets
The recent covid restrictions have paved the path for BTC and crypto in general. As reported by Bloomberg, due to the crisis and halt in the supply chain, Bitcoin temporarily lost 3.2% and was trading at $16,170 in Tokyo today. Ether plummeted by 4%, but Solana, Avalanche, and Dogecoin fell considerably more.
Another catastrophic event is the BTC ‘millionaire’ wallet which could cause further crashes in the asset and heighten the market’s instability.
Bitcoin ‘Millionaire’ wallets drop by 80%
In yet another sign of how far the crypto market has dropped since Bitcoin’s all-time high, Bitcoin billionaires are hurtling.
Glassnode, which records BTC wallets, said 23,245 bitcoin wallets had over $1 million on Nov. 25, which is a drastic drop when one compares the stats to that of Nov. 8, 2021, when 112,898 “millionaire” wallets existed as BTC/USD neared its $69,000 all-time high.
When Will The BTC Bottom Come About?
The famous Benjamin Cowen, a crypto expert, is resorting to studying the past bear markets to predict when Bitcoin will bottom out.
Overall, Cowen predicts a bottoming scenario similar to 2018’s when BTC’s price made a series of slightly higher lows before rapidly caving to new lows.
“Making the case for the bottom hasn’t really helped anyone in 2022 thus far, which is why we advised people not to expend too much mental energy attempting to predict a bottom in the year’s beginning.”
Hence, Cowen predicts that “if you give the bear market a little more time, it will eventually sink lower.”
If this trend continues, you may extrapolate where the 200-day simple moving average might cross if it keeps falling at its current rate.
Cowen’s Timeline For Bitcoin
On the basis of historical trends, Cowen predicts that Bitcoin will hit rock bottom on December 25th of this year, just before the next bull market begins. He predicts further bloodshed around the holiday season.
Wrapping up
Analysts can provide predictions, but there isn’t a guarantee that the situation will map out as they predict.
For more than a year now, Bitcoin has been in a bear market, and if we look at historical trends, this isn’t out of the ordinary. If we compare the length of the 2014 downturn to that of the 2018 downturn, we can see that we are inside the normal range for when bottoms occur, at around 14 months.
However, Bitcoin has dropped by 0.04% today to $16,608 as of this writing. These new developments continue to raise the public’s anxiety about the future.
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