Bitcoin Price Could Face a Further 22% Drop, Revisiting 2017 High

• Bitcoin has been predicted to trade as low as $20k, a 22 percent fall from the current price.

• The current market pullbacks have been linked to the reports of SpaceX selling its BTC holdings, and investors losing interest in the market.

Bitcoin (BTC) has fallen by 11 percent in its weekly chart to trade at $26,080.08 as bears dominate the market. This is in the wake of a recent report that SpaceX has sold its Bitcoin holdings after recording a write-down value of $373 million for the past two years. According to analysts, this coupled with China’s Evergrande bankruptcy report has potentially had a toll on Bitcoin, forcing investors to liquidate their positions. 

It can be recalled that Billionaire Elon Musk announced in 2021 that SpaceX had entered into the world of crypto as it purchased an undisclosed amount of Bitcoin. Tesla Inc which also purchased $1.5 billion worth of Bitcoin reportedly sold 75 percent of its holdings last year. Despite current market struggles, analysts have predicted a downward trend for the Bitcoin price. 

A crypto analyst identified as Ali has observed that whenever BTC trades below the 200-day SMA (Simple Moving Average), the asset falls to the realized price, and has repeatedly done that for the past 10 years. According to him, the realized price is currently around $20,350, a 22 percent fall from the current price. 

CryptoQuant Report on Bitcoin Price

Similar to this prediction, CryptoQuant has observed that the realized price of short-term Bitcoin holders could be a huge risk to the digital asset. The realized price of BTC currently held from one to six months was compared to the one held for a year in 2019. Per the report, investors are not heavily hit as compared to 2019 where losses were around 41 percent to 45 percent. With the current cycle, the loss is around 4 percent to 9.2 percent. 

It is necessary that even in the face of a further drop in the price of Bitcoin, this realized value should increase. An increase in realized value will indicate a double interest in holding Bitcoins.

Some of the reasons for the current fall and the potential pullback have been linked to a general lack of interest in the market. On Monday, Glassnode reported an extreme level of exhaustion and apathy in the BTC market, three days before the market declined. 

On a shorter timeframe, it could be argued to be a slightly top-heavy market, with many price-sensitive investors at risk of falling into an unrealized loss.

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On Friday, Coinshares also explained the connection between the lower trading volumes on various exchanges. 

In recent months, volatility has decreased, reaching levels comparable to the all-time lows observed at the start of the year. Historically, such levels have often marked turning points for significant price swings, either upward or downward.

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The sharp decline in Bitcoin price on Thursday, according to CoinShares, was a result of a large number of long positions on the Bitcoin futures market across different exchanges. In just 24 hours, traders liquidated about $1 billion. 

As of press time, Bitcoin had a 24-hour trading volume of $10,939,638,391 and a safety score of 51/100. Ethereum (ETH) is also down to $1,671.19 after falling by 9 percent in the last seven days. 

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