At the time of writing this post, Bitcoin is trading at around $23,000. Since making All-time-highs of over $67,000 in November 2021, the cryptocurrency is now down almost 67% now.
So that said…
How much more can Bitcoin fall?
If you look at the Bitcoin crash history, you will see that once every few years, Bitcoin falls by about 80%. It is not that unusual for this volatile crypto/asset to fall hard like that. That too sharply.
Here are few of the large corrections in Bitcoin prices in the past:
- Fall of -82.6% – During 10-12 April 2013 (when BTC prices fell from the then All-Time-High of $259 to $50)
- Fall of -86.9% – From 30 November 2013 to 14 January 2016 (when BTC prices fell from the then All-Time-High of $1163 to $152)
- Fall of -83.6% – From 17 December 2017 – 15 December 2018 (when BTC prices fell from the then All-Time-High of $19,666 to $3220)
- Fall of -60.8% – From 26 June 2019 – 12 March 2020 (when BTC prices fell from the then All-Time-High of $12,867 to $5040)
If we use the past as an indicator of future crash intensities, then a fall of 80-85% from previous all-time highs is indeed possible. To be fair, BTC is already covered a 67% fall and doesn’t have a lot more left up to 85%.
So if $67,000 was the previous high, then a fall of 80-85% means Bitcoin may eventually end up falling to the range of 10,000-13,500.
The ongoing Bitcoin Crash 2022 is already down 67%. A fall to 10-13,500 means a further fall of 40-55% from current levels of $23,000. That would be really scary, to say the least, but as I said earlier, it has happened in past a few times.
Note – This is just a speculation / loud thinking session and not a prediction.
There are obituaries being written about Bitcoin in specific and cryptocurrencies in general. But to be fair, this has all happened in past whenever there were crypto crashes. But still, Bitcoin did recover and made new highs eventually. Will it happen this time too? Will Bitcoin fall hard but recover and then make new highs very soon? I don’t know as I am not an expert in this field. I am just curious about the space and hence, I do track it at times.
The current fall is triggered in an environment of multi-decade high Inflation, looming recession and ongoing war. And it seems that the crypto space itself is facing the same headwinds as the other parts of the economy and other assets.
I have said earlier that when it comes to Bitcoin and other cryptos, you have a high chance of losing it all, but a small chance of winning it big. So you should never bet a lot on it. Anyways the new 30% Crypto Tax and 1% TDS on Crypto transactions have sort of killed the volumes in the domestic crypto space. But whoever you are, don’t gamble an amount that would give you sleepless nights and compromise your ability to achieve your financial goals. The space is volatile and it will remain so. It rises high and it falls hard. If you want to participate in it, then you got to deal with it. And if you are too worried about the falling value of your Bitcoins and other Altcoins (most of which are junk in my view), then it means you have too much riding on your crypto investments. In past, some had the view that investing 1% in Bitcoin was something that everyone should be doing. But I am sure that no one would be saying this right now at least.
But with this ongoing fall, I would say that I am a bit surprised as I thought that with the participation of institutions, and bigger investors, the space and crypto market was maturing and large falls (like 60-70% crashes) would become less frequent. But that is not the case. Still the wild west days in crypto space, even today.