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Crypto analyst Ali posed an interesting question to his Twitter followers. "Still waiting for Bitcoin to crash to $12,000?" he asked.
The industry saw liquidity problems, bankruptcies and the collapse of Terra and FTX in the past year and forecasts that the Bitcoin price would fall to $12,000 began to circulate. Shortly after the Terra collapse in June 2022, CNBC host Jim Cramer predicted that the price of Bitcoin would drop to $12,000.
Still waiting for #Bitcoin to crash to $12,000?
— Ali (@ali_charts) July 13, 2023
There's always the chance of a black swan event. But when you look at on-chain data there're more $BTC holders who bought between $16,000 & $30,000, than the ones who bought between $31,000 & $42,000.
The odds favor the bulls! pic.twitter.com/cu6ReSFaHq
To control inflation, the Fed began raising interest rates aggressively in 2022, which hurt risk assets including Bitcoin. According to estimates, the value of the entire cryptocurrency market declined by around $1.4 trillion last year as a result of falling prices.
Tomiwabold OlajideGiven the events that unfolded in the past year, some projections made at the beginning of the year suggested that Bitcoin would drop as low as $12,000 before rising again. These forecasts proved incorrect, as Bitcoin fell short of the $12,000 target and instead reached yearly highs of $31,000 in the first half of 2023.
Will Bitcoin crash to $12,000?
Not ruling out the chances of a black swan, an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences, Ali says Bitcoin has a lower likelihood of traveling down to the $12,000 mark.
Citing on-chain data, Ali says the odds favor the bulls. This is because more BTC holders bought between $16,000 and $30,000 than those who bought between $31,000 and $42,000. Thus, more reasonably, bulls would jealously guard the range between $16,000 and $30,000 as the stakes are higher.
At the time of writing, Bitcoin was down 1.28% in the last 24 hours to $30,354.
On-chain analytics firm Glassnode highlights the importance of where Bitcoin presently trades. It says around 592,000 Bitcoin have a purchasing price of $30,200, near the current spot price.
This suggests small price fluctuations in either direction might send 3.45% of the circulating supply into a position of profit or loss.
Arman Shirinyan
Dan Burgin
Alex Dovbnya