The big question - will BTC breach and fall further below the 20,000$ price support level now!!

Tradingview chart

BTC’s struggling to keep support at the 2017 BTC All time High price level!!

I just noticed that BTC price is struggling to find support at the All Time High price levels of 2017 ($20,000 range)!!!

2017 is a very special year for me, because I unintentionally experienced my first BTC bull run even though I was not a crypto person at that time.

Ofcourse, that year also brought into my life BtcSolarCat Garu, who has presented a lot of crypto articles and liked being referenced to as Bitcoin cat Garu with a heart of Bitcoin in the early days of my crypto article writing times.

Cat Garuji aka BtcSolarCat

Now, the question that popped in my mind was will BTC’s price breach this level and fall further, because this price level gives me other memories too.

Yes, in December of 2020, suddenly BTC’s price shooted above breaking that 2017 ATH ranges and mooning up further. This was an exciting time and just a few months ago on May of 2020, BTC’s price was not even 10,000$ and during the Black swan crash of March 2020, BTC’s price fell below 3,900$!!

Possibility of BTC’s price breaching this support range and falling further

2020, although was a year of big challenges, it was a grand year for me because I became a full time crypto creature having lost my other low paying job I was doing.

Suddenly, others began to look up to me, as someone with good knowledge on crypto, someone who has potential to do well in the field through all the accumulated knowledge, insights etc.

It appears all bull run years for BTC, is a rock star year for me in life. HA!!

Anyway… now it looks that BTC is likely to fall further down breaching this all important price support level now, which is quite surprising for me to believe but this seems to be the most likely scenario.

A few months ago, I thought BTC had found strong support at 30,000$ level, but BTC’s price finally struggled to keep price support at that level from May 11th and with choppy price action going above and below that price level, BTC’s price tumbled down finally from June 10th to this major support level price of $20,000.

Tradingview chart

Now, BTC is experiencing similar choppy price action with the price of BTC going above and below the 20,000$ support range often.

Another fall from this price level should take BTC to price ranges of $14,000 and $12,500 where there is major price support for BTC.

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Macroeconomic factors affecting price prospects of Bitcoin

Quantitative easing plus inflation drove Bitcoin’s price up on 2020!!

Of what, I understand the reason why BTC’s price may have not found the bottom, is due to macroeconomic fundamentals. During the pandemic year 2020, we were in the era of excess money supply in the US economy (which is one of the world’s biggest economy) , cheap borrowing rates propelled big investors to pour money into different asset classes, including Bitcoin.

Also, US Fed’s excess money printing narration and that of inflation, had big investors put their money on Bitcoin, as many announced that the asset is Gold 2.0, and a hedge against fiat currency inflation.

2022 Fed policy of Quantitative tightening leading to BTC’s declining prices

However, this year things have changed with Fed now hard pressed to bring inflation under control which is why the Fed recently as we all know raised interest rates, making the cost of borrowing costly. Fed’s monetary tightening policy measure is what might have brought Bitcoin’s price so low, as with borrowing costs getting higher, people tend to sell their investments for cash and save.

The focus is to pay back all loans with cash and flock to safe haven assets and USD is considered a safe haven asset, as its a World Reserve currency.

US Dollar Currency Index from tradingview

This is why the DXY index has risen, as can be seen the value of the US Dollar Index is at an ALL time High, people are hedging against uncertainty by storing wealth in the US dollars.

US economy seems to have entered a recessionary period

Right now, the US inflation figures are still high, as was evident with the July 13th CPI inflation numbers data being at 9.1% so intellectuals are talking that Fed might raise rates again to control inflation. This is why investors are not quite confident to invest in anything but want to hold on to cash and strong world currencies like US Dollars($).

Besides, it’s very likely the US economy is in a recessionary phase. Already the GDP growth figures for the first quarter for this year showed a -1.6% decline in GDP, the results for the second quarter will be up this July 28, and if the GDP shows declining values, then the US economy will be officially recognized on experiencing a technical recession.

During recession times, one can expect investors to save money, spend less on investing so, and so who knows, BTC's price may still decline further.

So, this is why I feel that BTC’s price will most likely breach this all important and memorable price support level of 20,000$!!

BTC’s price is definitely on the oversold territory

However, otherwise, BTC’s price looks oversold. Its weekly chart RSI level is oversold, plus its price is below the 200 DAy weekly average and historically at these ranges BTC would generally be brought up.

Tradigview

One can check other BTC data science charts at https://www.lookintobitcoin.com/charts/ and study other metrics like -
200 Week Moving Average Heatmap, Stock to Flow Model, The Puell Multiple, MVRV Z-Score, RHODL Ratio, Fear and Greed Index, they all shout out signals that BTC is at an oversold territory now. So there you have it, shrugs.

The little lost crypto fish sails on to catch the crypto wave

Since last year end, I have been having a very difficult time personally and added to that there have been innumerable crypto challenges because my Indian Government was making it damn hard for resident Indians to be in the crypto space. After that I was a little smashed because of the Luna-UST crash and I felt and still feel like I am not good at this crypto stuff which would make me a failure, because I know nothing else now!!

Yet, I continue to walk down this crypto path and maybe someday I can make a decent living being a crypto writer, who knows?. There is no doubt that the burning passion for crypto in my heart and soul is not dead despite all my failures in making it big in the crypto space !!

Concluding words with a personal note

Anyway thank you all for reading. I really wanted to do fundamental analysis at a more macro level - evaluating major stock indices, crypto performance against stock indices, commodity asset movements of assets like gold and silver, oil etc, but it will take time to go so in depth, so I wrote only on BTC but generally when one takes a overview of the macro-economic environment they evaluate most macro-economic segments comprehensively, but I mostly only a crypto person, so lag on that aspect.

Good day everyone, happy weekend!!

2017 is a very special year for me, because I unintentionally experienced my first BTC bull run even though I was not a crypto person at that time. Ofcourse, that year also brought into my life BTCsolarcat Garu, who has presented a lot of crypto articles and liked being referenced to as Bitcoin cat Garu with a heart of Bitcoin in the early days of my crypto article writing times.

Now, the question that popped in my mind was will BTC’s price breach this level and fall further, because this price level gives me other memories too.

Yes, in December of 2020, suddenly BTC’s price shooted above breaking that 2017 ATH ranges and mooning up further. This was an exciting time and just a few months ago on May of 2020, BTC’s price was not even 10,000$ and during the Black swan crash of March 2020, BTC’s price fell below 3,900$!!