Analyst Says Bitcoin Can Fall Deeper As Below $20K Can Trigger Threatening Margin Calls Worth Millions Of Dollars

Bitcoin Investors Shorting Positions Are a Threatening Margin Calls For Borrowing Firms.

A fall below the $20k support could trigger heavy liquidations for firms that have borrowed against Bitcoin with positions at that point.

Investors and firms are currently locked in a “battle of the leverages” as Bitcoin struggles to maintain its support level at $20k. That’s according to a top executive at Ballet Global Inc., Bobby Lee, the company’s founder and CEO, that provides crypto storage services.

Apparently, investors are shorting positions at around the $20k range while the firms struggle to keep the coin from hitting the same liquidation point. This unstable condition could result in the shorts winning and sending the price down below $20k.

According to Bobby, a drop below the $20k mark could be catastrophic to firms that have borrowed against the crypto.

BTC To Drop To $10k

Still, Bobby thinks that the current market conditions will force Bitcoin to retest the $20k support, and if this happens, it could drop further down to $19k and then $18k. Many firms that have borrowed against Bitcoin have their liquidation positions at around $20k.

“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 such, a retest of that support level could either mean liquidation or deployment of more 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.”

Celsius Network, which is turning into a terra-like disaster, is the biggest concern of the crypto community as the protocol Struggles To Stay Afloat With millions of DAI Debts. The Bitcoin Price Drop below $20K will bring some heavy Liquidation from Celsius.

However, to some like Peter Brandt, a retest of the $20k level could result in a temporal relief for investors as BTC would experience a short bull run, but this would only work if a breach below the support level is rejected.

What Happens Next?

For some time now, Bitcoin’s price has come very near, hitting the previous ATH of around $20k.

However, this level has been held fast every time, and the price has backed up a bit; it’s unknown how long this level could hold as crypto winter gets harsher.

A break of the $20k mark for Bitcoin would drag the entire crypto market to new low levels. At this moment, BTC is valued at around $20,680, just a few hundred dollars shy of the support point.

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