Two years ago, Bitcoin lost 40% of its market value in one day, going from USD 8,000 to USD 4,400. Although the war has increased the volatility in the market, it seems to be stabilizing.
After the World Health Organization (WHO) officially declared the coronavirus pandemic in 2020, markets reacted to the downside.
On March 12th of that year, the Bitcoin price dropped by 40%, going from almost USD 8,000 to USD 4,400 in a few hours. One day later, BTC even reached USD 3,700 at its lowest point, a value not seen in a year.
That raised the alarms, as that was the lowest price in a year, plus a 40% drop in one day; just weeks before the market had its sights on a new bullish cycle in which BTC would hit new all-time highs in the price.
That affected the whole cryptocurrency market, whose total capitalization dropped from over USD 220,000 million to about USD 138,000 million in a couple of days.
A Drop to USD 20,000 Would Be a Debacle
The Bitcoin price rose from under USD 4,000 to over USD 60,000, and a drop below USD 40,000 now scares the markets. In 2020, people dreamed of the price breaking the all-time high of USD 20,000 in force.
Since the price is around ten times higher, it would be disastrous to see BTC at USD 20,000 again.
However, Bitcoin exceeded the price it had before the pandemic in just a month and a half. After that, it has not dropped back to that level to date.
Although the value of BTC is even below the levels of last year, the 2020 crash still looks insignificant in the long term. It would have to drop by USD 15,000 or more in 24 hours to experience such a bloody day again.
Despite the War, the Bitcoin Trend Is Stabilizing
The pandemic was a declaration that affected everyone almost, but not quite, equally since each country has its particular contexts. Since the pandemic is global, the response from the markets also occurred worldwide.
Although some people present the scenario as a third world war, it only involves the Russian and Ukrainian territory. The reduced number of external stakeholders only have political and economic participation, not military.
Analyst Eduardo Gavotti recently said that markets would fall significantly only in a large-scale war scenario. In that regard, he described the pandemic debacle as an unprecedented event unique in history.
Although Bitcoin has recently experienced volatility, it is lower than during March and April 2020. For example, analytics data from Coin Metrics shows that the trend is stabilizing.
The Halving Event, Market Cycles, and Fulfilled Predictions
Another lesson about Bitcoin is that its market cycles are clear and start with its configuration. Various analysts agree that the reduction of BTC issuance is decisive in its long-term market behavior.
In 2020, everyone expected the halving event written in the Bitcoin code, which occurs on the network. That reduction in the supply of BTC occurs about every four years.
The pandemic marked a setback on that path towards new highs after a promising start to the year. However, Bitcoin did not take long to get back on track and fulfill the predictions.
By Alexander Salazar
