Bitcoin (BTC) is starting a new week still struggling to get the $20,000 support as the market takes a week of massive losses.
What felt impossible just weeks ago is now a reality as returns of $20,000 – all-time highs from 2017 to 2020 – give investors a grim sense of deja vu.
Bitcoin dropped to $17,600 over the weekend, and tensions escalated ahead of Wall Street’s June 20 open.
While BTC price losses here were statistically before – and even less – concerns are growing about the stability of the network at current levels, with a particular focus on miners.
Add to that the consensus that the macro markets may not have bottomed, and it becomes understandable why sentiment around bitcoin and the cryptocurrency is at record lows.
Cointelegraph takes a look at some of the key areas of interest to traders when it comes to Bitcoin price movement in the coming days.
Bitcoin saves $20,000 on the weekly chart
At $20,580, Bitcoin’s recent weekly close could have been worse – the largest cryptocurrency managed to hold at least a major support level on the weekly time frames.
However, the wick has extended below $2,400, and repeating the performance can add pain to those betting on $20,000, which is a significant price level.
Overnight, BTC/USD reached a high of $20,629 on Bitstamp before reverting to consolidation just below the $20,000 mark, indicating that the situation remains unstable on the lower time frames.
While some are calling for a sudden recovery, the general mood among commentators remains more cautiously optimistic.
“Over the weekend, while the paper bars were closed, BTC fell to $17,600, down nearly 20% from Friday due to good volume.” Arthur Hayes, former CEO of derivatives trading platform BitMEX, argued in a Twitter thread on June 2. , that smelling like a forced salesman led to a quick stop.
Hayes assumed that the recovery came once forced sales ended, but that more selling pressure may persist.
“Is it over yet… I wonder,” reads another post:
“But for skilled knife hunters, there may be additional opportunities to buy coins from those who have to hit every bid regardless of price.”
The role of crypto hedge funds and related investment vehicles in exacerbating Bitcoin price weakness has become a major topic of discussion since the May Terra explosion. With Celsius, Three Arrows Capital and others now joining the chaos, forced liquidations resulting from multi-year lows may be what is needed to stabilize the market in the long term.
“Bitcoin hasn’t finished liquidating the big players,” investor Mike Alfred argued on June 18:
“They will bring it down to the level that will cause maximum damage to the players who are most exposed to the light like a degree Celsius, and then all of a sudden it bounces and climbs higher once these companies are completely wiped out. A story as old as time.”
Elsewhere, $16,000 remains a popular target, which in itself only equates to a 76% decline from Bitcoin’s all-time high in November 2021. As Cointelegraph reported, the current estimate is as high as $11,000 – 84.5%.
$31,000 – $32,000 was broken and used as resistance. The same thing happens with 20 thousand – 21 thousand dollars. Main target: $16,000 – $17,000, especially between $16,000 and $250,000, summing up the popular El Capo of Crypto Twitter account.
She also described $16,000 as a “strong magnet.”
BTC/USD 1-week candlestick chart (Bitstamp). Source: TradingView
Stocks and bonds ‘has no place to hide’
Meanwhile, a clear view of stocks ahead of the Wall Street open offers little to no bullish potential for Bitcoin on June 20.
As noted by analyst and commentator Josh Rager, the relationship between bitcoin and stocks is still valid.
It seems that the stars are aligned with the shortest. Globally, stocks are lined up in their “worst quarter ever,” according to current data as of June 18, as cryptocurrency markets give investors a taste of reality months in advance.
As such, the only market player capable of turning the tide appears to be the central bank, particularly the Federal Reserve.
Monetary tightening, as some now claim, cannot last long, as its negative impact will force the Fed to start expanding the US dollar supply again. This, in turn, will see cash flow back into risky assets.
This is the perspective shared even by the Fed itself should the US face a recession – something that has a high chance of happening, depending on the interpretation of the Fed’s recent comments.