Crypto investors look with hope and apprehension at the 20,000 mark. For them, this mark will either be a recovery point or the collapse of their hopes.
Some reputable players in the cryptocurrency market remain optimistic. Mike Novogratz believes that Bitcoin will be able to stay above $20,000. Even if the FOMC decides to raise the discount rate today, investors will still support BTC if there are risks of its fall. As soon as the Fed stops raising rates, the capital is about to return to the shares of IT companies and the cryptosphere. Bitcoin continues to correlate with the US stock market. Over three days, the S&P 500 descended by 8.5%, and the price of Bitcoin descended by 27%.
Arthur Hayes, the founder of the BitMEX exchange, believes that if BTC falls below $20,000, a big sell-off starts in the cryptocurrency market.
As the BTC price declined, the institutionalists were able to withdraw significant capital from the market. In the first week of June, investors withdrew $56.8 million from the market. In the following days, the amount of withdrawn capital increased.
It is also worth noting that exchanges have not yet recorded an increase in the supply of Bitcoin. It is a good sign, which indicates that wallets with balances between 1K and 10K Bitcoins are not in a hurry to sell their coins yet.
What does the chart say?
The level of 20,000 already provided support for Bitcoin in December 2020. Then the BTC price even dropped to the 17,500 area, after which it showed an increase to the 38,000 area. Most likely, reaching the level of 20,000 is a matter of time. It is where Bitcoin will get a chance to recover. Here the bulls will try to act to send the BTC price to the 25,000 area.
At the time of posting, BTC/USD is trading near the 21,100 level. Immediate support lies in the 21,000 area. If the BTC/USD pair falls below the 21,000-20,825 area, it will increase the chances of hitting 20,000.