Bitcoin Faces 40% Crash to $70,000 Amid Tariff Fears
1min read Bitcoin, the world's largest cryptocurrency by market capitalization, is facing a potential crash to $70,000 within the next ten days, according to multiple price forecasting models. This prediction comes as the impact of "higher than expected" US trade tariffs continues to affect investor sentiment, particularly in risk assets like Bitcoin.
Network economist Timothy Peterson, in his latest analysis, warned that Bitcoin may return to its 2021-era all-time high of $70,000. Peterson's Lowest Price Forward (LPF) metric, a historically accurate tool for gauging long-term BTC price bottoms, suggests that if Bitcoin continues to track along the 75th percentile bear market range, $70,000 would be the practical bottom. This theory aligns with current LPF data, which last month indicated a 95% certainty that BTC/USD would preserve the 2021 highs as support.
Peterson's analysis also revealed that Bitcoin's price expectations have been in a state of flux. In just two days, the probability of Bitcoin having a positive month shifted from 75% to a 75% chance of having a negative month. This volatility in price expectations underscores the uncertainty and risk currently surrounding the cryptocurrency market.
The bearish outlook is not limited to Peterson's model. Onchain analytics firm Glassnode noted that many traders are seeking protection from further market turmoil. The demand for downside protection, as indicated by the trading of puts at a premium to calls, has reached levels not seen since Bitcoin was in the $20,000 range in mid-2023. Despite this heightened fear, Bitcoin's price has not collapsed in the same manner as equities in response to recent tariff headlines. This disconnect suggests that while panic is elevated, the price is holding, a scenario that often indicates a market bottom.
Ask Aime: What should investors do if Bitcoin crashes to $70,000?
The current situation highlights the challenges faced by Bitcoin and the broader cryptocurrency market. The potential crash to $70,000, if realized, would mark a significant drop from its recent highs and could test the resilience of investors and the market as a whole. However, it is important to note that these predictions are based on models and historical data, and the actual outcome may vary. Investors are advised to conduct their own research and consider the risks involved before making any investment decisions.
