A brutal day for losses is unfolding as Bitcoin crossed under its previous cycle high for the first time in history. The flagship crypto achieved a bear market first on June 18 as BTC price action gave up $20,000 support.
Bitcoin Now Below 2017 All-Time High
Data acquired from TradingView confirmed BTC/USD crumbling under $20,000 for the first time since December 2020, reaching lows of $18,880 at the time of publication.
As nerves heightened after the US Federal Reserve’s comments on the inflation outlook, crypto markets bore the brunt of a severe sell-off, which started after shock Consumer Price Index (CPI) figures in the past week.
The biggest crypto lost the psychologically important $20,000 mark opening the way for the bears to go on the rampage. The drop also made Bitcoin achieve a lifetime first, plunging below its previous halving cycle’s high for the first time since its inception.
There's a first time for everything https://t.co/1qLdb67aHR
— cevo (@cryptocevo) June 18, 2022
Bitcoin had until now avoided such a move, this being reserved for altcoins, notably Ether (ETH) earlier in the week. The largest altcoin has also slipped below the psychological $1,000 mark for the first time since January 2021.
While reacting, commentators attributed the latest weakness in the market to liquidity problems at investment fund Three Arrows Capital (popularly known as 3AC) and existing troubles linked with FinTech protocol Celsius and the general macro environment.
Luna, Celcius, 3AC = Contagion
Those will lead to more blowups that we are yet to hear of
Things likely get worse before they better. Until you start hearing about how all of these are intertwined and cause other funds to unwind becoming forced sellers https://t.co/oju42hSCNw
— Pentoshi Powell Jr 🔺🐧 (@Pentosh1) June 15, 2022
Zhu Su, Three Arrows co-founder, stated that the company was “in the process of communicating with relevant parties and fully committed to working this out,” without confirming the particular issues.
The sudden drop below $20,000 came during weekend trading where thin order book liquidity amplified the volatility.
A Bear Year Unlike No Other
Bitcoin sealed 37% losses for the first two weeks of the month, making June 2022 the worst month of June on record, based on data acquired from on-chain monitoring resource Coinglass.
Year-to-date, the biggest crypto traded nearly 60% lower at the time of publication, more than 70% below November 2021’s all-time highs of $69,000.Buy Bitcoin Now
According to previous reports, historical trends indicate that 80-84.5% is the classic drawdown target for most bear markets. This model projection puts BTC/USD at between $11,000 and $14,000.
Popular trader and analyst Rekt Capital tweeted:
“BTC still needs more volume & volatility than at present to match volume levels at previous Bear Market Bottoms at the 200 MA.”
Rekt Capital tweeted while continuing analysis of Bitcoin’s 200-week moving average, a major lifelong support line.
“Promising sign is that seller volume is above-average for the 1st time this week but much more is needed for final capitulation.”