Prolonged Bear Market Season for Cryptocurrencies is Causing Price Uncertainty within Community

Bitcoin (BTC) and virtual currencies have been in a bear trend since December 2017. At that time, Bitcoin reached $20,000 and a downtrend started that dragged most of the virtual currencies to new lows in more than a year. After uncertainty regarding what can happen with Bitcoin, there is a cryptocurrency trader and analyst that believes that the digital currency is not likely to reach $1,000.

Will Bitcoin Reach $1,000 In The Near Future?

PlanB, a recognized crypto analyst released a tweet in which he says that Bitcoin falling to $1,000 represents a 75% drop from current prices and a 95% drop from its all-time high. He has also compared this drop to what Amazon experienced back in 2000 and 2001 when it fell 95% from $105 down to $5.

The analyst went on explaining that Bitcoin has already been through a similar crash like the one experienced by Amazon. This happened back in 2011 when Bitcoin dropped 95% and reached a single digit valuation. Every single time that Bitcoin experienced a bear market, the drops have become less and less severe. PlanB added that the uncertainty about the value proposition for Bitcoin, including the attack on Mt. Gox or Initial Coin Offerings (ICOs) scams, is now gone. Thus, the future for Bitcoin remains bright.

The expert says that Bitcoin should be valued at $6,250 following his stock-to-flow analysis. Although this is not much higher than the current value of the digital asset, he said that Bitcoin could reach $10,000 once it halves.

Bitcoin is going to be halving in May 2020. Every single block will be rewarding miners 6.25 BTC compared to the current 12 BTC that miners receive every single time they find a block. This represents an increase of 260% from current prices.

After Bitcoin issuance reduction, PlanB says that considering the stock-to-flow ratios of other precious metals such as gold, silver or platinum, Bitcoin would be between 10 and 1000 times undervalued. Thus, a fair valuation for Bitcoin after the halving would be between $34,000 and $340,000.

Although PlanB remains confident about the future of Bitcoin, in the short term, there are other experts and individuals that believe that Bitcoin could continue to fall and reach new lows in more than a year.

Murad Mahmudov, a cryptoanalyst and part of Adaptive Capital, explained that the low amount of tweets related to Bitcoin on Twitter reached 2014 levels. This is lower than at any point in 2016. That means that there are very few individuals that care about decentralization and this sovereign currency or digital gold.

He has also explained that this confirms that in 2017, Bitcoin’s run to $20,000 was not enough to increase the community’s size. Although it could have a positive effect, the results seem to be minimal. Mahmudov has also mentioned that before Bitcoin could start to grow, it can drop to new lows dragged by virtual currencies such as EOS that are overvalued at current levels.

According to an analyst at Bloomberg, Bitcoin could drop down to $1,500 in the near future before being able to start growing once again in the future.

At the time of writing this article, Bitcoin is being traded around $3,830 and it has a market capitalization of $67.28 billion. In the last 24 hours, the popular digital asset dropped around 8.4%.

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