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The tussle in Bitcoin near the psychologically significant $20,000 continues. After losing 4.7% to $19.9K on Wednesday, the top cryptocurrency returned to $20.4K on Thursday morning. Ethereum is down 1.2% to $1085 in 24 hours, with the top 10 altcoins moving from a 2% decline (Tron) to a 3% rise (Solana).

The total crypto market capitalization, according to CoinMarketCap, remained unchanged overnight, remaining at $900 billion. The Bitcoin Dominance Index fell 0.4 points to 43.1%.]

On Thursday, the fear and greed index for cryptocurrencies stood at 11 points (“extreme fear”).

Ian Harnett, co-founder of Absolute Strategy Research, has suggested that bitcoin will crash to $13,000 this year, as it is characterized by an 80% decline from the all-time highs it has hit.

Arcane Research noted that in 2013 and 2017, BTC fell 85% and 84%. If history repeats itself, the downside potential for bitcoin persists to $10,350.

However, we note that in previous bullish cycles, the strengthening of BTCUSD has been several times stronger. For example, in 2013 it was more than 90 times. In 2017 it was 20 times, whereas in a one-year growth cycle to the highs of 2021, we saw “only” a tenfold increase in prices.

In our opinion, it is much more reliable to estimate that Bitcoin is finding a long-term bottom near the highs of the previous 4-year cycle, where the first cryptocurrency has already pulled back.

Even so, now may not be the best time to buy, as it may take a considerable amount of time before the crypto market digests the recent turmoil and enters a new phase of sustained demand from large segments of investors, not just stressed asset hunters.

The ECB chief has called for regulation of the cryptocurrency lending industry amid growing activity on crypto lending platforms and issues with Celsius and Finblox.

SEC Commissioner Esther Pearce believes that a crypto bear market would benefit the industry and create a more sustainable basis for its development.

Tesla CEO Elon Musk says he never encouraged anyone to invest in cryptocurrencies and that any accusations that he was promoting a “Dogecoin pyramid scheme” are unfounded. Musk recently sued DOGE for advertising for $258 billion.

Tether, the issuer of the largest USDT stablecoin by capitalization, has announced the release of a GBPT “stablecoin” pegged to the British pound.

This article was written by Alex Kuptsikevich, Senior Market Analyst at FxPro.

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