Points You Need To Know —
- According to co-founder of Absolute Strategy Research Ian Harnett, previous cryptocurrency surges have shown that bitcoin typically declines around 80% from all-time highs.
- According to Harnett, such a decline in 2022 would probably cause the most influential cryptocurrency in the market to fall to $13,000.
- The cryptocurrency market is tense as traders struggle with the effects of interest rate hikes and financial distress at significant companies in the sector.
Bitcoin may be about to decline even further if previous crypto explosions would be any indication. According to Harnett, the most popular currency might crash up to $13,000, or nearly 40% below current market prices.
Harnett explained his cautious prediction by stating that previous cryptocurrency rallies have shown that bitcoin often declines by 80% from all-time peak levels. For example, the cryptocurrency plunged by about $3,000 in 2018, following its peaking at around $20,000 in late 2017.
Thus according to Harnett, such a decline in 2022 would take the crypto back to roughly $13,000. This fall will become a support region for the token. At the peak of the 2021 cryptocurrency surge, Bitcoin reached a record high of approximately $69,000.
Traders baffled by the situations of the market, while Harnett studies the stats
The cryptocurrency market is tense as traders consider how increasing interest rates would affect investments that thrived during a time of the liquid monetary policy. The Federal Reserve increased its base interest rate by 75 bps last week, the highest one-time increase since 1994. The Bank of England and the Swiss National Bank then took similar actions in response to the Fed’s decision.
Digital assets have suffered as a result. Over the previous two weeks, the aggregate quantity of all cryptocurrencies has fallen by more than $350 billion. Tuesday’s price of $20,010 for one bitcoin was down 5% from the previous day. The top cryptocurrency has had a year-to-date loss in value of more than 50%. Based on these statistics, Harnett was able to predict the fall.
Even before Fed raised interest rates last week, the cryptocurrency market was already in trouble. The traders were alarmed by the $60 billion collapses of the well-known stablecoin, TerraUSD, and its sister currency Luna.