It’s getting ugly out there. On Friday, Bitcoin’s latest swoon saw it fall to $82,000, marking a drop of around 32% from its all-time high of $126,000. That high came just last month, but it now feels like a distant memory as exchanges liquidate over-leveraged traders, and retail buyers curse the day a cousin gave them that tip about Bonk coin. So just how much lower will prices drop?
There’s a good chance that $82,000 is not the bottom. While prices have rallied in the last few days, with Bitcoin trading around $86,000 on Monday morning, it’s easy to envision scenarios where it drops to $70,000 or lower. A jolt of dour macro-economic news or a major scandal (more on that in a second), and we could be right back in Crypto Winter.
As for how we got here, it’s pretty clear that Oct. 10 was the catalyst for the current malaise. That was the day that saw around $19 billion of forced liquidations—underscoring the perils that go with allowing crypto cowboys to leverage their positions by as much as 100x. That wipeout, in turn, spooked the many institutional investors that rushed into the sector amid the euphoria that came with President Donald Trump’s favorable regulatory policies. It turned out that it was just as easy for them to rush out again.
