What Bitcoin’s Decline To A New Cycle Low Says About The Market

Bitcoin was able to hold the $20,000 through times with expected volatility, triggering speculations that the digital asset had finally reached its bottom. However, recent developments in the crypto market proved that the cryptocurrency had indeed not reached its bottom, declining lower than the previous cycle low. 

What Triggered The Decline

One thing that bitcoin and the crypto market have proven time and time again is that it is impossible to predict what will happen. A week ago, no one would have believed the second-largest crypto exchange by trading volume would collapse and be looking at acquisition. The market followed accordingly with bitcoin falling to a new low.

When news broke that Binance would acquire FTX to keep it from going bankrupt, there had been a recovery in the market as some semblance of normalcy was recorded. But investors quickly realized the gravity of the situation and the price of bitcoin declined in response.

Shorts in the market had already been piling up following Binance’s plans to sell FTT tokens. The resulting market decline was a culmination of that. As investors got more afraid, funds were pulled from exchanges, putting a halt to the accumulation that the market had been seeing.

BTC sees new cycle low | Source: BTUCSD on TradingView.com

Bitcoin responded negatively to this and pulled the rest of the market down with it. Now a new cycle low has been established, showing that there could indeed be more decline in store for the digital asset.

Is Bitcoin Going Lower?

By the close of the trading day on Tuesday, bitcoin had marked a new cycle low at $17,200, beating its previous mark of $17,600. It showed that the digital asset had indeed not bottomed. Additionally, it points to a possible adherence to the established trend of bitcoin falling 80% from its all-time high value before marking a bottom.

However, bitcoin’s price still remains a long way from marking such a bottom. If it sticks to this trend, then the bottom would be around $13,000 for bitcoin, which would put it about 82% below its all-time high of $69,000. This would be more in line with previous cycle bottoms and would clearly mark a restart of a bull market.

Bitcoin has still been unable to find a balance point after touching $17,000 on Tuesday. It remains reasonable that a test of $17,000 would be in the works while the Binance-FTX deal is being hashed out. Also, this has put the bears in control of the market and they could continue to drag down the value with no significant support in sight. 

Featured image from Investor’s Business Daily, chart from TradingView.com

Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet…

Related Posts

Russia President Putin Calls For Blockchain-based International Payment System

Russian President Vladimir Putin said there is a need for a new and independent international settlement system amidst the sanctions and restrictions placed on his country. President…

Putin calls for blockchain-based international payment system

The Russian President criticized Western’s sanctions and urged for a system “independent of external interference”. Russian President Vladimir Putin criticized monopoly in global financial payment systems and…

Bitcoin price consolidation has shifted traders to these 4 altcoins

DOGE, LTC, LINK, and APE are showing signs of buying even as Bitcoin’s next directional move remains uncertain. Bitcoin (BTC) has been trading in a tight range…

A Dozen Digital Assets Record Double-Digit Gains as Crypto Markets Begin to Heal After FTX’s Collapse

At the time of writing the global cryptocurrency market capitalization is hovering around $842 billion on Sunday, Nov. 27, 2022. Bitcoin prices consolidated since the start of…

Another Orbeon Protocol (ORBN) Spike Propels Holders to Impressive Gains

[PRESS RELEASE – Please Read Disclaimer] When you’re just starting to learn about cryptocurrency investing, it can be hard to know which coins and tokens are worth…

El Salvador Launches a National Bitcoin Office (ONBTC)

El Salvador’s government doubled down on its crypto initiatives by creating a National Bitcoin Office (ONBTC) that will oversee all local projects related to the asset. The…

Generated by Feedzy