In this Bitcoin lunch, we naturally look at the live Bitcoin price and the prices of the top 25 crypto. Then we look at where the money is staying that BTC traders are taking out of the market. Then we analyze this crash and look at the Bitcoin outlook.
We start, of course, with the live Bitcoin price and the prices of the top 25 crypto.
Live Bitcoin price drops, prices top 25 exchange
At the time of writing, the live Bitcoin price is quoting EUR 21,325.10 ($22,425.55). This is 5.63% lower than during our Bitcoin lunch yesterday.
The prices of the top 25 crypto show a mixed picture. Some crypto currencies are writing green numbers and thus seem to be on the way to recovery. The biggest + today so far is with + 11.53% for ChainLink (LINK). On the other hand, there are crypto that continue to write hefty losses. Wrapped Bitcoin (WBTC) is losing the most at -7.44%. On the site of Tradeincrypto.com you can analyze all live crypto prices 24 hours a day.
Where is the money Bitcoin and crypto traders are taking out of the market?
Last November, the total market capitalization in crypto was still over $3 trillion. Meanwhile, after yesterday’s crash, less than 1/3 of that remains. The question, of course, is where did that over 2 trillion go? We can ask the same question if we look at falling stock prices or falling prices of other investments.
Analysts explain that we are making a logical fallacy here. Namely, there is a difference between value and fiat money. Value may have fallen by $2 trillion, but that does not mean that $2 trillion of cash has been released. Only the people who actually sell get to hold this money. Otherwise, there has been a drop in value. Perhaps an example will make things clear:
If we assume for the sake of convenience that 18 million BTC have not been traded for over a year, the market capitalization on January 1 at a price of $60,000 is thus 18 million * $60,000. If the value of those same 18 million BTC subsequently drops to $20,000 each on December 31, there is thus 18 million * $40,000 less in market capitalization without even 1 BTC being bought and sold. Thus, for the most part, there is no outflow of fiat money or other capital, but an evaporation of value.
The BTC crisis analyzed, what is different and why does BTC remain negative?
Right now we see that Bitcoin is posting the heaviest loss in the market. This is not due to a liquidation of the Celsius (CEL) loans. It looked like that this morning, but by quickly depositing a lot of additional capital, the liquidation price was lowered to $16,852.37. This has prevented the danger of an acute flooding of the BTC market.
The current price drop is probably due to the fact that Bitcoin still shows strong correlation with the (tech) stock market. As we see, the U.S. markets are (still) in a downturn. We also see that the BTC market is increasingly composed of institutional investors. They are currently cautious and awaiting the FED interest rate decision next Thursday. In addition, due to internal procedures they are often less able to act quickly.
In addition, Bitcoin is approaching the price of the top from the 2018 BTC bull run. Previously, the after each halving built a parabolic price pattern, where the price of the BTC would never fall below the top of the penultimate halving. When the BTC falls below the highest price of the peak after the previous halving (late 2017, depending on the stock market around $20,000.00) this pattern has been broken for the first time. This will change the perspective for long-term investors. After all, until now it was always the case that you made a profit if you held the BTC for more than 4 years. This could now be different for the first time. This uncertainty also plays a hefty role, as it would be fundamental and structural if that risk occurred.
What is the Bitcoin price expectation in the short and long term?
In the short term, the question is whether Bitcoin will recover quickly. We are currently seeing the BTC price recover again after the price fell to $20,816 this morning. The recovery is about 10% from this low, so that seems solid. On the other hand, there are many risk factors in the market. So depending on how the US market reacts, we could expect a consolidation phase between $20,000.00 and $25,000.00 (the bottom of the ‘void’) leading up to next Thursday’s Fed decision.
If we then assume a bearish price trend due to a disappointing FED decision, the psychological barrier of $20,000 can be broken through. At that point, therefore, the top of the previous halving circle has been undermined and a further decline to the CME gap between $19,080.00 and $18,415.00 is lurking, following the doomsday scenario of a price target of ± $13,000.00.
Otherwise, a recovery to $24,000.00 and possibly $29,000.00 is possible. In the longer term, the outlook remains bullish as long as we do not break through the peak of the penultimate half. The video analysis below shows the various scenarios.
So, all in all, it is definitely advisable to do your own good research and take into account making money in an uncertain market.
We will of course continue to follow the developments. Will you too?
Want to stay up to date on the latest stock price developments?
You can always follow the developments yourself with our WANT crypto analyses or the background articles and previews on the crypto market and Bitcoin. Of course, you can also follow the live quotes 24 hours a day if you want to stay informed in real time. Are you interested in other investments besides crypto? Then our weekly Monday morning price forecast might be a reading tip. “Please note: We never give financial advice, so our contributions can’t be interpreted that way either. Always do your own research and decide on rational grounds if, when, what and how much you want to invest in.”