On November 10, the rate of bitcoin updated the historical maximum value at $69 thousand, after which it began to decline. As of November 24, the first cryptocurrency is trading at $56, 700, for the last two weeks, the asset has fallen by 19%. Investors have concerns about the possible start of a long-term correction.
The downward trend is reminiscent of 2018, when the value of the first cryptocurrency fell by almost 85% – from $20 thousand to $3 thousand. Then such a sharp decline in quotations was a surprise to many investors, who suffered large losses. Experts told how low the price of the asset may fall during the current market cycle.
Not Bitcoin lower than $30 thousand
Most likely, bitcoin will not cost below $30 thousand, the trend remains growing and with a high probability the price of the asset will reach $80 thousand in 2022, predicted Anton Kravchenko, CEO of Xena Financial Systems. He warned that in case of a sharp rise in the value of the first cryptocurrency above $100 thousand, a strong correction may occur, possibly up to $60 thousand.
Not BTC below $20 thousand
Bitcoin is unlikely to ever fall to $20 thousand, thinks co-founder of ENCRY Foundation Roman Nekrasov. He called the lower bar on the price of the asset $28-33 thousand. A huge block of buy orders will not let the cryptocurrency fall below this level, the specialist says.
The rate of bitcoin is entirely dependent on supply/demand. Bitcoin supply won”t increase much over time: new coins are produced more slowly, the existing coins are distributed among the wallets of investors and those are unlikely to unite and decide to sell their assets simultaneously, the expert explained. According to him, it is not profitable for them. If the supply is always limited, the demand, on the contrary, is constantly growing – both on the part of retail and institutional investors, says Nekrasov.
“Those investors who enter the asset at $20, 000 to $30, 000 to $50, 000 won”t want to sell it at a loss. Moreover, they already had the experience of such unwise actions before their eyes: those investors who bought bitcoin at the peak in December 2017 and then rushed to sell it during the cryptowinter found themselves in a loss. But they should have just waited an extra year, ” the expert explained. He”s sure that even if bitcoin falls to $30 thousand, bitcoin investors will not rush to sell it in a minus.
From the point of view of technical analysis of the market it is possible to consider growth from $4 thousand to $69 thousand as an impulse trend wave, noted Victor Pershikov, a leading analyst of 8848 Invest. If we assume that the correction to this significant growth may start next year, its maximum, at which the correction will not break the current uptrend, should not exceed 78.6% of the trend, which means the maximum correction target near $17.8 thousand, the specialist found out. He called it the most critical correction, which should be prepared for, but its probability now is extremely low.
Also, when estimating the maximum reduction of BTC price in a normal market (without force majeure), you can start from the payback price of the main volume of mining business. In other words, below what price mining becomes unprofitable for the largest participants, and what level they will defend through purchases of BTC or derivatives. Given the cost of electricity of 4 rubles per kilowatt, and the current indicators of complexity, for such equipment as Whatsminer m21s such a level of prices for BTC, serves the mark of $15.5 thousand, Pershikov added. It is important to understand that this is a very rough estimate, because the cost of electricity is not the same everywhere, and complexity is volatile. But even with a cursory analysis, it is clear that a 3-4 times fall from the current rate will not lead the mining industry to losses or loss of profit, the expert stressed.
In general, the bitcoin price drop below $20 thousand is technically possible, but fundamentally unlikely, Pershikov said. He concluded that even with such correction the industry will not experience big shocks because in the past the price corrections were much more significant.
Not below $1, 000
Markets may grow infinitely as well as fall almost 100% in times of great depressions and shocks, warned Andrey Podolyan, CEO of Cryptorg. He made a cautious prediction that bitcoin will not be worth less than $1k.
“A huge number of people, funds and even states are already involved in the game. All this will not allow the price of cryptocurrency to fall to zero, ” Podolyan emphasized.