It is the first time the Bitcoin price has lost the all-time high of a previous market cycle to the downside. Fidelity Investments and JP Morgan consider that Bitcoin is below its ideal value, which leads some analysts to make bullish predictions.
Market analysts and investors feared that the price of Bitcoin (BTC) would break the USD 20,000 level. That finally happened, implying the breaking of a historical pattern for the cryptocurrency in the market.
The value of the cryptocurrency even fell to USD 18,700 for the first time since 2020. Even though it had a slight rebound, it is trading at around USD 19,165 per unit on exchanges, according to TradingView.
The drop in the price of Bitcoin is more than 6% compared to the opening of the daily candlestick. However, the value of the cryptocurrency has fallen by more than 27% of its market value over the last week.
Beyond being a relevant psychological mark, the USD 20,000 mark had great historical value for Bitcoin. That level was recently crucial as it was the limit set in the market cycle before the current one in the 2017 bullish run.
Once the Bitcoin price had broken the all-time high of a previous market cycle, it had never lost that mark to the downside. For that reason, the pioneering cryptocurrency is now in unknown territory with that new drop in its value.
In addition, the price of Bitcoin remains below the 200-week simple moving average (SMA), which has historically worked as significant support. Although it has broken that average before, there have been few precedents.
Possible rebound and bullish expectations
Bitcoin investors are currently fearful due to the bleak outlook for the cryptocurrency caused by its recent price drop. Various analysts had predicted the fall toward USD 19,000 and said the scenario would worsen once that movement was complete.
However, the price of Bitcoin has historically rebounded after briefly dropping below the 200-week SMA. The difference now is the breaking of the market cycle, which had never happened before.
Financial institutions Fidelity Investments and JP Morgan have recently assessed that Bitcoin is below its ideal value. In other words, it should be worth more than it is due to the current situation of the network. That has led some renowned analysts to make notable bullish predictions about the pioneering cryptocurrency.
According to a recent report on cryptocurrency adoption worldwide, the growth of Bitcoin is just beginning. Metrics from that study indicate that the price could reach USD 500,000 within the next decade. It is still a long way from that, with over 70% below its all-time high of USD 69,000 per unit in November 2021.
When writing this article, Bitcoin is trading at around USD 17,980 and has accumulated a 12.9% loss over the last 24 hours. While its daily trading volume is above USD 33.69 billion, its market capitalization is about USD 341.70 billion, according to CoinGecko.
By Alexander Salazar
