After slumping to a low of $19,764 on Wednesday, bitcoin climbed back above $20,000.
The largest cryptocurrency by market capitalization was recently trading at $20,314, down 0.4% over the past 24 hours.
The $20,000 price point remains pivotal as analysts debate whether bitcoin (BTC) will see further declines akin to 2013, when BTC fell by 85%, and 2017, when it tumbled 84%. If bitcoin experiences a similar fall this time around, it could see prices nearing the $10,000 mark.
Ian Harnett, co-founder and chief investment officer of Absolute Strategy Research, warned in a CNBC interview that bitcoin could fall as low as $13,000, which would be almost an additional 40% decrease from current price levels.
“We would still be selling these kinds of cryptocurrencies into this environment,” Harnett told CNBC.
FxPro Senior Market Analyst Alex Kuptsikevich said that declines similar to 2013 and 2017 are unreliable because of BTC’s muted strength in the most recent bullish cycle. In 2013 and 2017, bitcoin saw prices increase 90-fold and 20-fold respectively, while in 2021 bitcoin only saw a 10-fold increase in price.
“In our view, it is much more reliable to estimate that bitcoin finds a long-term bottom near the highs of the previous four-year cycle,” Kuptsikevich said.
Some analysts say that bitcoin’s volatile pricing amid wider economic conditions has decreased demand from long-term holders.
Kuptsikevich said that investors should wait before buying, even though bitcoin may be approaching a stable price point.
“It may not be the best time to buy, as it may take considerable time before the crypto market digests the recent turmoil and enters a new phase of sustained demand from broad segments of investors, not just stressed asset hunters,” Kuptsikevich said.