Bitcoin is under $20,000 — what does it mean?

On the third weekend of June, Bitcoin went through a liquidation cascade, crashing straight through $20k, then $19k and even $18k. The main question on all traders' and investors' minds is now this: has a new crypto winter arrived, or is this just a trick to transfer Bitcoins from the weak hands to the strong hands?

No matter how bad things seem right now, it's worth remembering March 2020. In a single day, Bitcoin collapsed by 50% to $3,500, and everyone believed that it was over for the crypto market. However, BTC recovered fast and almost reach $70k a year and a half later — a 20x increase from the bottom.

Will we see such a fast recovery this time? The key difference between March 2020 and now is this: a year and a half ago, central banks were lowering interest rates and printing loads of money. But now the rates are growing, and central banks are taking liquidity out of the system.

Right now it's crucial not to focus on Bitcoin's current price, be it $15k, $20k, or $30k. When tensions run high, any price can look wrong. Instead, look into the future, to what will happen in 2 years and in 5 years.

Two years from now, the next Bitcoin halving will take place. In theory, we should see a new ATH after that, as it has always happened in the past. This is made even more probable by the fact that interest rates can't keep increasing forever, so in two years they could be going down again to jump-start the failing economy.

If you look at BTC on a 5-year or 10-year scale, remember that the total number of Bitcoins is limited to 21 million. Moreover, part of this BTC will be irreparably lost, be it as a result of users' errors or because some holders will die suddenly without passing the private keys to their families.

Thinking long-term allows you to reduce the stress of the current moment. In our next article, we'll discuss how the situation in the crypto market as a whole has changed, so don't forget to read the newsletter.

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