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The Bitcoin price has been selling off for weeks now, as more and more investors continue to reallocate funds out of risky assets and into safe-haven investments in preparation for the lockdown restrictions coming into play all across the world.
We are already seeing a lot of countries passing laws in place to ban travel and non-essential activities, potentially slowing down the economy again and ensuring the citizen’s seat at home.
However, the big question many traders are asking is:
How will a slowing economy, business closing, and worldwide restrictions affect how the Bitcoin price will react in the coming days?
Well in this Bitcoin analysis, we will be taking a look at what happened when we went through the first worldwide lockdown in 2020 and comparing the price chart with what is going on right now on the Bitcoin price!
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How Bitcoin Reacted During The First Lock Down
The first lockdown we experienced started during the early months of January. And during this period we saw the Bitcoin price range then sell-off a bit before changing direction and shooting up massively for months.
If this price pattern was to play out again as we are entering a new set of lockdown restrictions worldwide, then we can expect to see the Bitcoin price range and sell-off a bit before reversing and surging higher as it did before.
What Is Bitcoin Doing Now?
Well, Bitcoin has been ranging for a while now exactly the way it did back in 2020 while governments were contemplating going into full lockdown.
If all these country’s restrictions effectively come into play, we might see weak investors panic sell off their holdings, pushing the Bitcoin price lower for a while exactly like we saw play out in 2020 also.
After that initial sell-off, we can then expect to see the Bitcoin price to base out, find support, and then begin to rally back up. This new rally could potentially push us up to $100k or even past that in the coming weeks or months.
What Does This Mean For Bitcoin
This means that there is a very high probability that the slowing economy might not have that much of an effect on the growth of Bitcoin in the coming days.
And if the past (lockdown of 2020) thought us anything, it is that Bitcoin is here to stay and the slowing economy and rising inflation only makes a prospective switch to cryptocurrencies a much more realistic idea.
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