27 July 2022 | ZebPay Trade-Desk
Bitcoin’s price has been moving up and down for more than three years, with the most recent surge occurring just seven months ago. Post the rise, Bitcoin (BTC) experienced one of its most brutal falls in 2022, with its price falling below $20,000 in June after peaking at $68,000 in 2021. June 2022 became the worst month for Bitcoin since September 2011, its monthly losses amounted to 40%. The asset also posted its biggest quarterly losses in the last 11 years. However, the current market sell-off will not cause Bitcoin to crash, and bear markets will only last until 2022. In fact, since the first Bitcoin block, or Genesis block, was mined in January 2009, Bitcoin has endured its fair share of crypto winters, a drop in price of the groundbreaking crypto.
Bear Market #1: Bitcoin crash from $32 to $0.01 in 2011
Bitcoin price broke its peak of its first psychological level-$1.00 in April 2011. The price rose from $1 and hit its peak of $32 on June 8, 2011. But the joy didn’t last long as Bitcoin’s value plummeted to the bottom of $0.01 over the course of a few days. The sharp sell-off was largely attributed to security issues at the now-defunct Mt. Gox, a Japanese crypto exchange that traded the bulk of Bitcoin at the time. The exchange had 850,000 BTC stolen due to a security breach on its platform, raising major concerns about the security of Bitcoin stored on exchanges. After BTC lost around 99% of its value in just a few days, Bitcoin’s flash crash in June 2011 became a huge part of Bitcoin history. The event started long before BTC price rallied to the previous high of $32 and only rose to new highs in February 2013. It is difficult to follow the price of Bitcoin before 2013 compared to the latest charts. Popular price tracking services and websites like CoinGecko or CoinMarketCap do not track bitcoin prices before April 2013.
Bear Market #2: Bitcoin tanks from $1,000 to below $200 in 2015
According to BTC fee statistics accumulated through Cointelegraph, Bitcoin reached $ 100 in mid-April 2013 after which it surged to $1,000 in November 2013. Bitcoin entered a huge bear market rapidly after breaking $1,000 for the first time in history, with the BTC price tumbling below $ 700 one month later. The price dropped as Chinese financial institutions started a crackdown on Bitcoin in 2013, prohibiting monetary establishments from conducting BTC transactions. The cryptocurrency plummeted over the subsequent years, bottoming at around $360 in April 2014 and later to $ 170 in January 2015.
The long crypto winter of 2014 has been linked to the hacked crypto exchange Mt. Gox, which halted all bitcoin withdrawals in early February 2014. Some major financial authorities have also raised concerns about Bitcoin with the US. The Commodity Futures Trading Commission claimed in late 2014 that it had power over “Bitcoin price manipulation.” The overall sentiment surrounding Bitcoin was mostly negative until August 2015, when the trend started a long-term reversal. Bitcoin finally returned to the $1,000 price level in January 2017 amid the strong bull market. This was the longest price rally period ever in Bitcoin’s history.
Bear market #3: Bitcoin plunges below $3,200 after hitting $20,000 in December 2017
After Bitcoin rallied to $1,000 in January 2017, Bitcoin continued to climb to $20,000 by the end of the year. However, like Bitcoin’s previous all-time high of $1,000, the triumph of $20,000 was short-lived as Bitcoin fell, losing over 60% of its value in a matter of months. The year 2018 was quickly dubbed “crypto winter” as the bitcoin market continued to shrink, with BTC bottoming out around $3,200 in December 2018. In January 2018, Coincheck suffered a gigantic hack that resulted in the loss of around $530 million worth of NEM (XEM) cryptocurrency. The bear market was further exacerbated when tech giants like Facebook and Google banned Initial Coin Offering(ICO) ads and token sale ads from their platforms in March and June 2018, respectively. Crypto regulatory efforts around the world also contributed to the bearish trend as the US Securities and Exchange Commission denied applications for BTC exchange-traded funds.
Bear market #4: BTC slumps from $63,000 to $29,000 in 2021
A bearish sentiment had captured the crypto market until 2020 when BTC not only got back to $20,000 but entered a massive bull run, surpassing $63,000 and $1 trillion market cap in April 2021. Bitcoin also suffered a slight downtrend. Shortly after bitcoin hit new all-time highs in mid-April, bitcoin retreated, with its price dropping to $29,000 in three months. The 2021 mini bear market came amid growing media narrative suggesting that bitcoin mining has an environmental, social and governance (ESG) related issue.
The global ESG-related FUD around bitcoin was more intensified when Elon Musk’s electric carmaker Tesla stopped using bitcoin as payment in May, with the CEO citing ESG concerns. Just three months later, Musk admitted that around 50% of Bitcoin mining was powered by renewable energy. The bear market didn’t last long, even though China launched a major campaign against local miners. The uptrend returned in late July, with Bitcoin eventually rallying to an all-time high of $68,000 recorded in November 2021.
Bear market #5: Bitcoin plummets from $68,000 to below $20,000 in 2022
Bitcoin did not break $70,000 and commenced losing at the end of 2021. The cryptocurrency slipped right into the bear market during November, recording one of its largest crashes in 2022. In June, the cryptocurrency plunged beneath $20,000 for the first time in 2020, fueling severe worry at the marketplace. The ongoing market is basically attributed to the disaster of algorithmic stablecoins — particularly the TerraUSD Classic (USTC) stablecoin — which might be designed to guide a strong 1:1 peg with the U.S. greenback through blockchain algorithms instead of equal coin reserves.
USTC, a very popular algorithmic stablecoin, misplaced its greenback peg in May. The depegging of USTC precipitated a huge panic over broader crypto markets because the stablecoin had ended up as the third-biggest stablecoin before collapsing. The crumble of Terra induced a domino impact at the relaxation of the crypto marketplace because of huge liquidations and uncertainty that fuelled a disaster in cryptocurrency lending. A variety of world crypto creditors like Celsius had to drop withdrawals because of their incapacity to hold liquidity amid brutal marketplace conditions. Bitcoin has traditionally seen its price alternate beneath preceding highs for greater than 3 years. The preceding top of $68,000 befell seven months ago, and it’s yet to be seen whether or not Bitcoin could go back to new heights.
Disclaimer : This report is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. The Company has prepared this report based on information available to it, including information derived from public sources that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. This report is preliminary and subject to change; the Company undertakes no obligation to update or revise the reports to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Trading & Investments in cryptocurrencies viz. Bitcoin, Bitcoin Cash, Ethereum etc.are very speculative and are subject to market risks. The analysis by Author is for informational purposes only and should not be treated as investment advice.
