The Bitcoin price could drop to $20,000, according to a technical chart master. At the current price of $34,488, the prediction implies that the currency has a 42% downside.
Bitcoin has been in the spotlight recently after it declined sharply in May. The currency has dropped by more than 45% from its all-time high. This has seen its total market capitalization drop from more than $1 trillion to slightly above $700 billion, according to data compiled by CoinMarket Cap.
There are several reasons why the Bitcoin price has struggled. For example, crypto investors are afraid of high interest rates as the US economy recovers.
Furthermore, inflation has surged, initial jobless claims have fallen, and analysts expect that the unemployment rate declined to 5.9% in May. This means that the Fed could be under pressure to move considering that other central banks like the Bank of Canada and Reserve Bank of New Zealand have sounded hawkish.
Second, there are fears of regulation in the cryptocurrency industry, especially after the recent Colonial Pipeline hack. Indeed, in an interview with the FT, the new head of the Office of Comptroller of Currency (OCC) said that the US would add more regulations to protect investors. He said:
“It really comes down to co-ordinating across the agencies. Just in talking to some of my peers, there is interest in co-ordinating a lot more of these things.”
Other countries considering adding more regulations are China, Turkey, and India.
Third, Bitcoin prices have dropped because of Environment, Social, and Governance (ESG) concerns. This is because BTC mining uses a proof-of-work technology that consumes a lot of power.
Bitcoin price prediction
In an interview with CNBC, Carter Worth, of Cornerstone Macro predicted that the BTC price would slump to $20,000. He identified the price by looking at the currency’s highest point in December 2017. Further, he pointed to the fact that the currency was forming a head and shoulders pattern. This is usually a bearish pattern in price action analysis.
You can watch the entire interview below and comment below if you believe his thesis. If this happens, it means that other altcoins like Cardano, VeChain, and Polkadot prices will also crash because of the close correlation that exists.