Bitcoin reached a low point registered at $20,100 early this Wednesday, June 15. The market is in its most delicate position in three years.
During the first hours of Wednesday, June 15, the price of bitcoin reached scary levels: it was very close to going below $20,000, a mark that appears to break and would leave
users facing an unprecedented scenario to date in the history of digital currencies in the market.
A breakout of $20,000 would mean that, for the first time in history, bitcoin would not receive the support of a market cycle. Specifically, the market cycles that the digital asset has fulfilled focused on the procedures of diminishing the monetary emission in the Bitcoin network through the halving.
Every 4 years, the amount of BTC that gets handled in each Bitcoin block gets halved. That situation happened before at least three times, which leaves users dealing with four market cycles.
Those cycles have clearly harmed the market. Each new cycle brings higher price highs than the previous one. And never in history has the digital asset fallen below the previous cycle high once it broke it.
When BTC first surpassed $1,000 during the 2017 cycle, it never crumbled back from that stage, which was the previous cycle’s high. In that bull run, bitcoin approached a new high level registered at $20,000.
The rise in the market value has attached to this pattern of increase and the closest it had come before breaking it was during the March 2020 pandemic-driven crash. But at that time, BTC crashed down to $3,000 momentarily.
Now, the panorama shows landscapes much more precarious in perspective. Bitcoin bounced as high as $21,000 but was almost touching the $20,000 mark.
The Possible End of the Halving Cycle for the First Digital Asset in the Market
The level of 20,000 has not been lost. But the closeness of that downside break seems to be taking its toll on investor trust to make new moves. This behavior appears due to the fear and greed index on Alternative.me. According to records on this outlet, the market is currently dealing with the extreme fear of investors.
Although this situation has not changed, the current level of the said index shows the lowest rates in almost three years, even before the pandemic impacted the market.
Perhaps the fear experienced happens due to the risk that bitcoin will lose a trend that looked so safe and certain until now. The halving cycle and its impact on the market were already taken for granted in a certain way and now it seems at risk of losing that certainty.
By: Jenson Nuñez