Peter Schiff, an outspoken critic of Bitcoin for years, is once again warning of a major crash. According to the economist, Bitcoin could fall back to $20,000 if the Bitcoin price loses support around $50,000. That statement comes at a time when Bitcoin is trading around $66,000, well below the recent peak of this cycle.
Repetition of old patterns?
Schiff bases his warning on historical corrections. In previous cycles, Bitcoin sometimes lost 70 to 80 percent of its value after a top. From a recent peak above $120,000, a pullback towards $20,000 would not be mathematically impossible.
Yet the context today is different than in previous bear markets. Institutional adoption has increased, ETFs have attracted billions, and Bitcoin has become more integrated into traditional financial markets. This does not mean that significant declines are excluded, but the market ecosystem has become more mature.
Schiff maintains his well-known position that Bitcoin has no intrinsic value and is mainly a speculative bubble. At the same time, history has shown that Bitcoin has always recovered after major corrections and reached new highs.
Geopolitical tensions dampen sentiment
The timing of his warning is striking. The tensions surrounding possible military escalation between the United States and Iran are causing unrest on the financial markets. In periods of acute geopolitical uncertainty, investors often opt for liquidity and safety, which can temporarily put pressure on risk investments such as Bitcoin.
Historically, Bitcoin often reacts negatively in the initial phase of shocks. Only later can the narrative shift towards “digital safe haven”, depending on how the situation develops.
On-chain signals give a mixed picture
On-chain data shows that investors are currently under pressure in the short term. The Short-Term Holder SOPR indicator is trading below 1. That means that recent buyers are selling at a loss on average, a classic sign of capitulation and weak sentiment.
At the same time, another indicator points to the opposite risk. Bitcoin’s short-term Sharpe ratio has turned sharply negative. In previous cycles, this metric often dipped to extreme levels just before a local bottom formed. That suggests that much of the speculative enthusiasm has already been washed out of the market.
Is $20,000 possible?
A pullback to $20,000 would imply a decline of about 80 percent from the top, similar to previous bear markets. In theory that is possible. In practice, this would probably require a combination of:
- A clear deterioration in the macroeconomic outlook
- Continued geopolitical escalation
- Further outflows from ETFs
- A broad risk-off movement in stock markets
For now, the data mainly shows increased volatility and no structural collapse.
Source: https://newsbit.nl/peter-schiff-waarschuwt-opnieuw-bitcoin-kan-crashen-naar-20-000-dollar/
