Panic and mass purchases. What will happen when bitcoin falls below $ 20 thousand.

Experts predicted whether the rate of the first cryptocurrency will collapse by half from current levels and how catastrophic consequences this will have for the market.

At the end of January, many people started talking about the fact that the price of bitcoin could fall to $ 20 thousand and below. This was warned by cryptanalyst Benjamin Cowan, famous writer Robert Kiyosaki and ex-head of the BitMEX cryptocurrency exchange Arthur Hayes. According to the latter, if bitcoin falls below $ 20 thousand, it will be a disaster for the digital asset market. Experts of "RBC-Crypto" explained whether the value of the cryptocurrency is able to collapse below $ 20 thousand and what can happen in this case.

Reduction of capitalization

The possible fall of bitcoin below $ 20 thousand will be a disaster for the entire cryptocurrency market, as it will lead to the maximum reduction in its capitalization, said Artem Deev, head of the analytical department of AMarkets. In his opinion, in this case, there will be a sharp outflow of money from the industry, which will further bring down the quotes and the entire market.

"There are fears that this will undermine investor confidence in digital assets in general," the analyst admitted.

A collapse below $20,000 is hardly possible in practice, Deev said. Despite this, there are no special chances for strengthening bitcoin yet and there will not be for a long time, the analyst believes. According to his forecast, in the near future the cryptocurrency may decline to the level of $ 30 thousand At this mark, it is likely that investors will prefer to start acquiring the asset, and this will support the rate of the first digital currency and again become a trigger for a small increase, Deev added.

Unlikely scenario

The collapse of bitcoin below $ 20 thousand can occur in theory, since the crypto market in its short history managed to show investors how unpredictable it is, explained Nikita Soshnikov, director of the Alfacash cryptocurrency exchange service. In his opinion, this scenario is unlikely, since on crypto-exchanges you can see "walls" of orders. This allows you to find out the range of prices at which bitcoin will begin to be massively bought, the expert noted.

"For example, now the "wall" of orders is in the region of $ 30-32 thousand The presence of such a "wall" suggests that if the coin falls suddenly to this level, then it will immediately be bought off by those who are just waiting for the fall. And thus, the bitcoin rate will not be allowed to fall below, "Soshnikov explained.

Those who want to buy bitcoins for $ 20 thousand - even more, says Soshnikov. For this reason, even if the cryptocurrency rate falls to this level, it will instantly be bought up and the value will be pushed up, the expert believes.

Not a disaster

At the moment, there are no fundamental factors in the market that can bring down the value of bitcoin to $ 20 thousand, says Viktor Pershikov, a leading analyst at 8848 Invest. In his opinion, even a theoretical reduction in the rate of cryptocurrency to this mark will not lead to disastrous consequences. To this, Pershikov gave three arguments:

First, the price of bitcoin does not reflect its value, and is partly speculative, not investment in nature, so the fundamental advantages of the cryptocurrency in the event of a price collapse will not disappear anywhere;

Secondly, new equipment for mining, even at this price, will bring income, albeit small, so it will still make sense to mine bitcoin at such prices;

Thirdly, such a drop in price will cause an increase in the number of buyers, including from institutions, who will be able to enter the market at more favorable prices in anticipation of future growth.
"Although at the moment of the collapse of bitcoin below $ 20 thousand can greatly undermine the profitability of investments in cryptocurrencies, a global collapse will not destroy the market," Pershikov added.