On Monday, June 15, 2022, the price of bitcoin tapped a low not seen since mid-December 2020 as the price hit $20,080 per unit. A large number of crypto supporters are debating whether or not the drop is the market’s bottom or if the fall could lead to deeper losses. At the time of writing, bitcoin is 70% down from the $69K all-time high (ATH) but traditionally, bitcoin is known to drop around 80% or more from ATHs recorded in the past.
Will Bitcoin fall more than 80% this time around?
The crypto economy has had a tough few weeks as top crypto asset Bitcoin (BTC) has lost 35% in the past 14 days. Speculators have gone from guessing whether or not this might be a bear market to saying it definitely is a bear market.
During the past few days, there’s been a lot of capitulation and on Monday, hundreds of thousands of crypto traders were liquidated for close to $1.30 billion. Two days later, bitcoin dropped to a low of $20,080 per BTC and the last time BTC traded at this price was 17 months ago in mid-December 2020.
At current USD values, bitcoin is down 70% from the $69,000 ATH it hit on November 10, 2021. During the bull runs of 2013 and 2017, bitcoin (BTC) fell more 80% from its previous price peaks. The founder of Coingecko.com, Bobby Ong, tweeted on bitcoin’s falls in recent bull runs and he included ethereum (ETH) in the 2017 run.
For instance, after BTC’s price high in 2013 of around $1,127 per unit, by 2015 BTC was down 82% at $200 per coin. Ong’s tweet shows that In 2017, BTC jumped to $19,423 per unit but by 2018, the price dropped to a low of $3,217, which was 83% lower than the price high.
The Coingecko co-founder explained that Ethereum fell 94% during the 2017-2018 price cycle. Ong’s tweet was posted on June 11, 2022, and at that time, BTC’s USD value was 59% lower than ATH’s, and ETH’s value was 69% lower. At the time of writing, the dollar value of ETH is 75.4% lower than the all-time high price of the crypto asset ($4,815) reached on November 10, 2021.
Of course, there’s a lot of speculation and theories about whether or not BTC’s price will go lower from here. An 80% drawdown from BTC’s ATH in 2021, would be roughly $13,800 per unit. If ethereum saw a 90% fall from the ATH last year, then the USD value would be around $488 per ether. Some speculators predict BTC could hit $12K per unit and ETH could tap $360 per unit.
Drop below $19,000 wipes out pre-halving high prices, Bitcoin miner struggle and macro disasters continue to rock global markets
So far, since the crypto-economy ATH last year, over $2 trillion in value has left the crypto ecosystem. Traders are also worried about the upcoming halving, as prices will have to be much higher when miners only get 3.125 BTC per block found. A drop below $19,000 per BTC will erase pre-halving high prices. Additionally, using current BTC exchange rates and $0.12 per kilowatt-hour (kWh), only seven ASIC mining rigs are seeing stable profits.
Bitmain’s Antminer S19 XP with 140 terahash per second (TH/s), using the same electricity cost of $0.12 per kWh, gets an estimated $3.49 per day in profit. The Microbt Whatsminer M50S with 126 TH/s gets an estimated $1.51 per day in BTC profits using the same electrical costs. At $0.12 per kWh, machines producing 84 TH/s are not profitable, unless they get cheaper electrical resources.
All of these signs and the thousands of laid off crypto workers over the past few weeks no doubt show that this is definitely a bear market. The question remains whether or not the 80%+ pullback will occur this cycle and how long the bear run will last.
There’s also the macroeconomic disasters and concerns over rising inflation, central banks’ hiking rates, and the ongoing war between Ukraine and Russia. Bitcoin steadily rose to its ATH while Americans and citizens from other countries received stimulus payments. While bitcoin and the crypto markets never experienced a Covid-19 lockdown economy before, the crypto economy has never been tested under current circumstances, either.