Bitcoin (BTC) Below $20,000: 5 Things To Know About It

Bitcoin (BTC) below $20,000: 5 things to know about it. Is Bitcoin Hegemony Over? With a price below $20,000, the cryptocurrency seems to continue its inescapable fall. This symbolic plateau was reached on August 28, and since then, Bitcoin has continued to fluctuate around this value.

It must be said that investors are used to September being a bad period. It is even nicknamed the “Septembear” for the recurrence of the fall in the markets when it arrives. And BTC will not have escaped it with a however modest drop of 1.5%. But is this fall only linked to an unfavorable month? We are going to tell you all about Bitcoin via 5 things to know about the world's first cryptocurrency!

Bitcoin at $20,000, a duel between bulls (bulls) and bears (bears).

In finance, there are very specific concepts including that of bulls and bears. Bulls in English, are investors who try to drive up the price of a share. Bears, on the other hand, wish to lower the price of a share. And that's exactly what happens with a showdown between these two entities. 

Currently, experts are trying to guess which of the two will come to fruition in the next few months. For the moment, the future of Bitcoin (BTC) seems very unclear. The one seems to be holding at $20,000 for lack of volatility. Traders go there with their comments on the social network Twitter.

 

Some of them believe that Bitcoin should recover in the following days. This is the case of the @CrediBULL Crypto account with 338,000 subscribers to its credit.

II Capo, for his part, said that the recovery will only be short-lived. For him, BTC should briefly recover to $23,000 before falling back to the $16,000 mark estimated as a floor value. In short, the forecast data is more or less similar, but the timing is different. One thing is certain, the sequel promises to be spiced up for Bitcoin traders!

The European energy crisis is impacting the market globally.

Even the sharpest traders won't have time to rest on their laurels. The energy crisis in Europe has caused the price of the euro to fall drastically, even causing us to reach Euro/Dollar parity. On September 5, the euro is trading at its lowest level since 2022.

Graph of the course of the euro against the dollar. The euro falls below the dollar (0.99) - Source: Trading View

This decline follows diplomatic complications between Russia and Europe. Russia was due to reopen its Nord Stream 1 gas pipeline this weekend but changed course following the European Union's announcement of a possible cap on Russian energy prices. 

Today, Russia is threatening to cut off all energy supplies if such decisions are made. According to experts, the crisis is not ready to stop. 

Europe could see a glimmer of hope, only if the value of the dollar were to fall or if relations with Russia were to improve. At the moment, even Plan B, a Stock-to-Flow model maker for Bitcoin, has suggested investing in Bitcoin only after all basic needs have been met.

Rising Dollar Drives Crypto Stock Dump.

Unlike the euro, the dollar is doing very well. The crypto market has suffered the consequences and seems crushed by the force of the latter. The US dollar index (DXY) exceeded 110 on September 5, 2022. This value had not been reached for several decades since such records were recorded only in 2002, 20 years earlier!

DXY over a period of 20 years. The dollar hits 110 - Source: Trading View

The dollar remains the strongest currency in the world and this impacts all economies negatively. For the future, we can only expect a mass crypto dump, to compensate for the unbridled rise of the latter.

Bitcoin is below the realized price of holders.

It had only happened 2 times that the realized price of the holders was lower. The realized price is defined as an indicator that measures the average bid-weighted price of what all market participants paid for 1 Bitcoin. Currently, this price is located at $21,600 and is considered to be a support price.

This phenomenon does not encourage buyers to sell their Bitcoin tokens. This attitude leads to a decrease in the volatility of the currency. Today, around 7.5 million Bitcoin are considered dormant or lost. The buyers seem not to capitulate and refuse to sell their Bitcoins. 

This attitude explains well why Bitcoin has only risen or fallen slightly for the past few months. There is a long-term holding trend that has reached record highs in just 2 years. Bitcoin holders are less likely to trade their tokens, as they see this currency as a long-lasting investment.

Holding or loss of BTC - Source Glassnod/Twitter

Fear dominates markets fearing a global recession.

Crypto Fear & Greed index is an indicator that measures investor sentiment in the market. And we can say that the results are worrying with a gauge that only reaches 20 out of 100 during the weekend. But what is even more revealing is that this same index has halved over the past 3 weeks. 

This decrease is explained by the various factors that we have given you previously. Europe's energy situation does not seem to be on the right track to improve. 

Worse still, a market rally can be expected to lead to massive crypto sell-offs, causing Bitcoin to fall all the way back to lows. At the moment, Bitcoin doesn't seem to be on the way to a comeback anytime soon.

Crypto Fear & Greed Index - Source: Alternative.me