Analyst Says Bitcoin Could Fall Even Further as a Price of Less Than $20K Could Trigger Threatening Margin Calls Worth Millions of Dollars

A drop below the $20k support level could result in large liquidations for firms that have borrowed against Bitcoin and have positions at that point.

As Bitcoin struggles to maintain its support level of $20k, investors and firms are locked in a “battle of the leverages.” According to Bobby Lee, the company’s founder and CEO, Ballet Global Inc., which provides crypto storage services.

Investors appear to be shorting positions in the $20k range, while firms struggle to keep the coin from reaching the same liquidation point. This volatile situation could lead to the shorts winning and driving the price below $20,000.

According to Bobby, a drop below $20k could be disastrous for firms that have borrowed against cryptocurrency.

Bitcoin is expected to fall below $10,000

Still, Bobby believes that current market conditions will force Bitcoin to retest the $20k support level and that if this occurs, it will fall further to $19k and then $18k. Many borrowed companies against Bitcoin have liquidation positions worth around $20,000.

“I think we will test $20,000 and go to $19,000-$18,000; There are a lot of funds, large borrowers of Bitcoin who have liquidation positions in the $20,000 range.”

As a result, a retest of that support level may result in liquidation or the deployment of additional collateral to establish a lower liquidation position.

“There’s a lot of Bitcoin pledged as collateral that might have to be sold in its price drops into the $15,000 to $20,000 range”

He further said “I wouldn’t be surprised if Bitcoin fell to $10,000, But this is short-term pain. I am still very bullish longer term.”

The biggest concern of the crypto community is the Celsius Network, which is turning into a terra-like disaster as the protocol struggles to stay afloat with millions of DAI debts. Celsius will liquidate heavily if the Bitcoin price falls below $20,000.

According to some, such as Peter Brandt, a retest of the $20k level could provide investors with temporary relief as BTC experiences a brief bull run. However, this would only work if a breach below the support level is rejected.

What Will Happen Next?

Bitcoin’s price has been approaching the previous ATH of around $20k for some time now.

However, this level has held every time, and the price has backed up slightly; it’s unclear how long this level will hold as crypto winter intensifies.

If Bitcoin falls below $20k, the entire crypto market will fall to new lows. BTC is currently valued at around $20,680, just a few hundred dollars from the support level.

Disclaimer: The information in this article should not be considered financial advice, and FXCryptoNews articles are intended only to provide educational and general information. Please consult with a financial advisor before making any investment decisions.