The cryptocurrency market has shed over $1 trillion of its value since last November. The plunge came amid scrutiny from investors amid Kazakhistan’s chaos, a major sell-off in the stock market, and news that Federale Reserve will raise interest rates sooner than expected.
Joseph Edwards, the head of financial strategy at crypto finance firm Solrise, has been preparing for the downward price trajectory for the better part of last year.
In an interview with Insider, Edwards said that Bitcoin could endure “a deeply negative Q4” amid macro and regulatory risks as well as technical pressures. As trading volumes diminished extensively, Edwards predicted that Bitcoin could dip to the $20,000 level.
Nonetheless, the largest cryptocurrency in the world surged to an all-time high price of nearly $69,000 on November 10. The price increase was dirven mainly by the approval of futures-based Bitcoin (ETF) in the U.S. and the latest upgrade in the blockchain’s network called “Taproot” upgrade.
However, after only two months from its all-time high, Bitcoin shed 50% of its value. The cryptocurrency is trading around the $36,500 level as of Tuesday morning in New York.
“It does seem to be the case that we are in a full-on bear market now,” Edwards, the former head of research at crypto brokerage Enigma Securities, said in an interview. “It’s a little later than we were expecting in terms of seeing these sorts of declines, but it’s just a natural flow of crypto.”
Bitcoin could dip to $18k and $20k
In his view, Edwards believes that the crypto market is going to suffer severe declines with short-term rebounds. Crypto traders have explained that bitcoin’s daily Relative Strength Index indicator has reached an oversold level, which means that a short-term bounce is imminent. Many also view $30,000 as the price bottom for bitcoin.
“I think that’s optimistic,” Edwards said of the $30,000 bottom call. “I think you’re more likely to see somewhere between $18,000 to $20,000 across the entire year.”