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The bottom may not be there, but how low can Bitcoin go?

The bottom may not be there, but how low can Bitcoin go?

Bitcoin experienced one of its longest downtrends yet. Although it has risen recently, there has not been enough upside momentum to really guarantee that the market is headed for another bull run. Instead, downtrends continued to strengthen, leading to speculation as to when the bottom might be reached. This also raises the question of how low the price of the digital asset could fall if it has not yet bottomed.

what the story says

When trying to determine how far a digital asset like Bitcoin might fall, it can often be helpful to look at how that asset has performed in the past. For Bitcoin, it is not difficult to navigate its historical data considering that the cryptocurrency has been around for just over a decade. Despite his relatively young age, his past market movements continue to provide a wealth of data when it comes to analyzing his movement patterns.

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Following previous bull markets, the price of bitcoin fell much lower than expected. An example follows the 2017 bull run, in which the price of the digital asset reached close to $20,000. What followed was an extended bear market that lasted for the next three years. Meanwhile, the price of the digital asset would drop more than 80% from its all-time high, leaving it at a low of $3,000, which is a drop of 84%.

BTC continues its recovery trend | Source: BTCUSD on TradingView.com

This was also the case during the 2013/2014 bull rally, when the price rose above $1,100 at its peak and then fell below $150 at its lowest. Considering this, the current bitcoin price may not be the end of the downtrend.

How low can Bitcoin go?

Considering the above analysis, a new downtrend may occur in the near future for bitcoin. This takes into account that the market is turning into a full-fledged bear market. This would mean that the bottom may not be $20,000 for the current trend as is commonly believed.

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If bitcoin were to follow its previous price movements, an 80% decline from the all-time high value would mean the digital asset would touch at least $13,000 before the bear market ends. This would be well below expectations for the digital asset.

However, bitcoin continues to fend off bears. On Monday morning, the digital asset broke above $30,000 again and with further momentum expected after the opening of the trading week, the cryptocurrency could be on track to test $35,000.

DailyFX Featured Image, Chart from TradingView.com

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