Bitcoin price falls 56% this year, trades below $20,000. What’s the next support level for the crypto?

Bitcoin, the world’s largest and most popular cryptocurrency, has slumped in 2022 amid a risk-off mood driven by rate hikes and inflation fears. The digital token is down more than 56% in 2022 (YTD) so far, and is trading far away from its record high level of nearly $69,000 it had hit in November last year. The coin is currently trading below the $20,000 level.

Cryptocurrency prices have suffered this year amid Federal Reserve rate hikes and stubbornly high inflation. After crypto’s last two-year hibernation ended in 2020, the sector spiked to around $3 trillion in total assets last November, before plunging to less than $1 trillion recently. The collapse of the Terra/Luna ecosystem and the continued concern about hedge fund Three Arrows Capital Ltd. further rattled investors.

A British Virgin Islands court has ordered the liquidation of Three Arrows Capital, the crypto hedge fund that bet big on everything from Bitcoin to the ill-fated Luna tokens and then succumbed to a $2 trillion wipeout of the digital-asset markets.

"The crypto markets remained largely unfazed by the recent liquidation of the crypto hedge fund, Three Arrows Capital(3AC). The market sentiment has not changed much either, remaining deep in the “extreme fear” zone. On the hourly time-frame, the BTC trend has formed a channel pattern, consolidating between $20K and $22K. The daily RSI is hovering around the 25 level, reeling in the oversold zone. The next key support is expected at $14,000. WazirX's Trade Desk.

Given how closely it has been trading with US stocks, Bitcoin could reach as high as $28,000 by the end of the year, according to an analysis from Deutsche Bank, as reported by Bloomberg.

"Bitcoin has been down by 56% since the beginning of the year. The market is currently not dominated by either bears or bulls, but if buyers can hold BTC above US$20,000, we may likely see short-term growth soon. But if the price falls below the current level, there are chances of bears taking over the market, and the next support level would be at US$17,000," said Edul Patel Co-Founder CEO of Mudrex-A Global Crypto Investing Platform.

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