Have we entered the so-called Bitcoin winter? The world’s most popular cryptocurrency has hit its lowest value in more than 18 months. At the moment of writing, the price of one BTC is $20,775 which is more than three times lower than the price it had back in November.
According to analysts, there are several reasons why Bitcoin has entered a bearish stage. One of the key reasons is American inflation, which the Federal Reserve is trying to deal with by increasing interest rates. Recent data shows that inflation in the US has reached its highest percentage in more than 40 years, and the way to fight it is by pumping up the rates.
Another reason is that the global fuel and food crisis might be on the horizon, caused by Russia’s war on Ukraine. The fear of the crisis is making crypto holders sell their assets, which is making the BTC price tumble even further.
How Low Will Bitcoin Go?
It seems that the big question at this point is whether BTC will go under $20,000. Some crypto experts believe that the 20k threshold is the last line of defense before a catastrophe. If Bitcoin goes under that number, it could make holders lose their faith and start selling even more.
A worrying sign that such a thing might happen is that several major cryptocurrency companies have announced their plans to let go of some of their employees. Coinbase, for example, is laying off 18% of its employees, with companies like Gemini, BlockFi, and Crypto.com reportedly planning to do something similar. Further, the crypto bank Celsius Network has frozen the user accounts last Sunday.
Spring Comes After ‘Bitcoin Winter’?
All the signs are there that Bitcoin winter is coming. Many experts believe that even if BTC doesn’t go below the 20k mark, its price still isn’t going to reach the 2021 levels anytime soon. In fact, most analysts believe that the crypto winter of 2022 will last until, at least, the end of the year.
Judging by previous experienced, the BTC winter could even last for another year and a half. The good news, however, is that past experiences teach us that Bitcoin always comes stronger after a major crash. It’s already happened several times, most notably in 2018 and 2020.
In fact, the 2020 Bitcoin winter, which was caused by the COVID-19 pandemic, saw the BTC value dropping to under 5k. However, in just a few months’ time, Bitcoin entered a bullish phase, which eventually brought its price to over $60,000.
That said, it might be the right time to start thinking about investing in Bitcoin. Buying BTC at the price of 20k or lower seems like a very good investment that’s likely to pay off in 12-18 months.
