Crypto Strategists Alerts About Bitcoin Price Drop

According to one expert, the world’s most popular cryptocurrency could drop as low as $13,000, or nearly 40% below current prices.

Back to $13000

Ian Harnett, co-founder and chief investment officer of Absolute Strategy Research, said on CNBC’s “Squawk Box Europe” on Tuesday: “We would continue to sell these types of cryptocurrencies in this climate.”

Bitcoin may be about to decline further if previous crypto booms are any indication.

This is actually a liquidity game.

What we have discovered is that it is not a store of value, a commodity, or even money.

Harnett explained his negative prediction by stating that previous cryptocurrency rallies have shown that Bitcoin often declines by 80% from all-time highs.

According to Harnett, such a decline in 2022 “would take it back to roughly $13,000,” a “major support region” for the token. At the height of the 2021 cryptocurrency boom, Bitcoin hit a record high of roughly $69,000.

“The bitcoins of this world are doing well in a world where liquidity is abundant,” added Harnett. When that liquidity is wiped out, as central banks are currently doing, those markets may come under enormous pressure.

Bitcoin investors are in big trouble

The Federal Reserve raised its benchmark lending rate by 75 basis points last week, the largest single increase since 1994.

The Bank of England and the Swiss National Bank took similar action in response to the Fed’s decision.

Before the Fed hiked interest rates last week, the cryptocurrency market was already in trouble, with traders alarmed by the $60 billion crashes of well-known stablecoin terraUSD and its sister token luna.

The decline in the value of a derivative token intended to be redeemable one-for-one for ether has worsened financial woes at major players in the sector, including Celsius and Three Arrows Capital.

The cryptocurrency market is tense as investors consider how rising interest rates would affect assets that grew at a time of low interest rates.

Digital assets have suffered as a result. Over the past two weeks, the total value of all cryptocurrencies has dropped by more than $350 billion.

Tuesday’s price of $20,010 for one bitcoin was down 5% from the day before. The leading cryptocurrency has seen a loss in value of more than 50% so far this year.

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