CNBC's Squawk Box recently hosted former hedge fund manager and Mad Money host Jim Cramer. During the interview, Cramer warned investors about their cryptocurrency investments. He also predicted that Bitcoin's price would still hit $ 12.000.
Bitcoin investors need to take action now
Bitcoin bulls must take the necessary steps to ensure that its price does not collapse. According to Cramer, the sector is already in a precarious situation. A new low in the price of Bitcoin would put the market in greater danger. He added that if Bitcoiners don't take the necessary steps, Bitcoin could soon be trading at $ 12.000.
Cramer might do well to follow his advice. Last week, the former hedge fund manager said he strongly believes in BTC and ETH. According to him, the two main digital assets are the only "genuine" cryptocurrencies. Cramer also stated that he has holdings in cryptocurrencies. Therefore, he cannot advise anyone not to invest in cryptocurrencies.
Bitcoin miners' revenues drop to a new 12-month low
A data from blockchain.com showed that Bitcoin miners' earnings are at their lowest in 12 months. This explains the sharp drop in the share prices of Nasdaq-listed miners. Shares of Hut 8 mining and Marathon Digital have dropped more than 40% in the past 30 days. Earlier in the week, Bitcoin's hash rate hit new highs.
Furthermore, several data indicate that Bitcoin mining is now extremely competitive and costs have increased significantly. As a result, Bitcoin mining has become more difficult. Bitbank crypto analyst Yuya Hasegawa warned that "Bitcoin price recovery may be slow if the current situation persists." According to him, miners will start selling their Bitcoins once there is a recovery in the price.
The price of Bitcoin drops below $ 20.000
The BTC price action broke the $ 20.000 support on June 18th. This indicates that Bitcoin (quotation BTC) plunged into a bear market.
The data shows that BTC dipped below $ 20.000 for the first time in nearly two years. It is currently trading at $ 19.091. The cryptocurrency market was subject to an intense sell-off following the higher-than-expected interest rate hike by the US Federal Reserve.
The sell-off began last week after the release of consumer price index (CPI) data, which came in above expectations. In addition to breaking support, Bitcoin recorded another novelty. It is the first time in its history that it dips below its previous mid-cycle peak.
Industry analysts cited three reasons for this new Bitcoin weakness. According to them, the general macro context, Celsius problems and 3AC liquidity problems are the reasons why Bitcoin broke the $ 20.000 support level.
The worst month
Based on this development, it is the first time that in the first two weeks of a month BTC / USD has recorded a loss of 37%. According to the Coinglass on-chain analytics platform, June 2022 is the worst June in BTC history.
Historical bear market data indicates that 80-84,5% is the classic drawdown target. Therefore, the minimum that BTC / USD can reach during this bear market would be between $ 11.000 and $ 14.000.