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Bitcoin Price Prediction: These Factors May Drive BTC Price Down to $12,000

19 Oct, 20222 min readAnalytics
Bitcoin Price Prediction: These Factors May Drive BTC Price Down to $12,000

Bitcoin has been facing enormous liquidity conditions in recent times. Moreover, the global liquidity crisis has also impacted the crypto space, specifically Bitcoin. Therefore, a significant bearish trend has been speculated for the star crypto that may drag the price lower.

Markets largely depend on liquidity and hence a well-known crypto market analyst, Sam Rule, focuses on global liquidity & its impact on the BTC price. As a result of the current liquidity crisis, central banks combat it by keeping interest rates low and purchasing sovereign bonds and other financial instruments.

Rule further states that the bank balance sheets of various central banks like of US, China, Japan, etc have peaked in 2022, which are 20 times higher than that of 2003. And interestingly, Bitcoin’s new All-time high in March 2021, had collided with the peak of the annual accumulation of these banks.

Ever since then the banks have stopped pumping liquidity into the markets and revised their policies to fight the rising inflation. Conversely, the banks have constantly drawn the liquidity out of the market, hence creating the liquidity crunch that had a macro impact on the stock as well as the crypto markets.

On the other hand, the Bitcoin miner reserve & the BTC price has witnessed a significant drop as the active sales by the miners have declined over a month. As the miner reserves are on a constant rise, Bitcoin is expected to undergo a short-term bounce very soon.

However, because the support at $19,100 has been tested numerous times, it may break easily with an extended bearish action. Once these support levels are breached, the BTC price may face a steep plunge below the yearly highs.

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