Bitcoin has hit a new low in the current bear market. According to data from CoinMarketCap, BTC fell below $20,000 on Saturday morning. The 20,000 USD is a threshold that has been regarded as a crucial support level for the cryptocurrency with the highest market capitalization. Currently, the live Bitcoin price is $19,057.34, with a 24-hour trading volume of 28,262,779,835 USD. In the last 24 hours, Bitcoin has lost 9.67%.
Bitcoin falls to its 2017 all-time high
Bitcoin has hit a new low since December 2020, falling below $20,000 for the first time. As the crypto market’s anxiety deepens amid tighter money conditions, more evidence of strain within the industry emerges. According to reports from Bloomberg, the largest cryptocurrency by market value has dropped for 12 days in a row.
Surging recession fears are crippling appetite for risky assets, and that has crypto traders remaining cautious about buying Bitcoin at these lows. The news flow has been terrible for cryptos.Edward Moya, senior market analyst at Oanda.
The crypto world is about to get a lot worse. Although BTC’s $20,000 milestone is primarily symbolic, experts predict that a fall beneath this level might lead to a “wave of forced liquidations.”
Extreme volatility and a lack of liquidity in the Bitcoin market have made it increasingly difficult for large-scale crypto investors to continue holding onto their holdings. As a result, they’ll be forced to close positions on BTC derivatives products because they don’t have enough collateral. Such occurrences would certainly only add to Bitcoin’s price decline, triggering more liquidations.
On June 15, the Federal Reserve increased its benchmark lending rate by three-quarters of a percentage point, making it the biggest hike since 1994. In addition, central bankers signaled that they would continue to raise rates aggressively this year in an effort to control inflation. A higher-rate environment has been harmful to riskier assets like Bitcoin, which has seen a drop of more than 70% from last year November.
At press time, Ethereum’s support level of $1,000 has also evaporated, putting the cryptocurrency sector on even more dangerous ground. The current live Ethereum price is USD 991.64, according to CoinMarketCap data, with a trading volume of USD 13,621,714,966 over the past 24 hours. Ethereum is down 9.67% in the last 24 hours.
According to Arthur Hayes, former CEO of BitMEX, $20,000 and $1,000 represent price levels for BTC and ETH, respectively, that would cause “significant sell pressure” if they are exceeded. The market capitalization of all cryptocurrencies has dropped by around 5% in the last 24 hours.
The piercing of the trough, on the other hand, may lead to a bounce in bitcoin’s price as it has done in previous bear markets. According to Mike McGlone, an analyst for Bloomberg Intelligence, Bitcoin’s price may find support at around $20,000 based on historical data.
The crypto market falls deeper into loses
After the collapse of the Terra blockchain and the recent decision by crypto lender Celsius Network Ltd. to suspend withdrawals, a market that had been sliding for several months on expectations of a less accommodative Fed has now shown signs of more widespread distress.
Since then, bitcoin and other cryptocurrencies have been on a continuous plunge, aided by investors withdrawing hundreds of millions of dollars from decentralized finance due to concerns about a worsening bear market.
The mood was further enhanced by the Three Arrows Capital crypto hedge fund, which reported significant losses and said it was considering asset sales or a bailout. According to Glassnode, even long-term investors who have avoided selling are coming under pressure.
The crypto market fell 80% from its highs in late 2021, when Bitcoin traded at around $69,000 and investors piled money into every speculative investment. Cryptocurrency market capitalization is currently about $900 billion, down from $3 trillion in November, according to CoinGecko.
According to sentiment in cryptocurrency markets, the unknown unknowns are the most threatening at this time. Counterparty risk’s resurgence is a reminder that even things that appear to be precise aren’t always quantifiable. Risk is the stuff that remains after you’ve covered everything else.
According to a Wall Street Journal report, the cryptocurrency party is coming to an end. The crypto sector was founded on swagger, enthusiasm, and optimism. These days, all three are in short supply as losses and job cuts rise. Bitcoin’s supporters’ rallying cry against naysayers was “have fun staying poor.” Those who didn’t invest were allowing the future of finance to pass them by.
Cryptocurrencies have been among the first assets sold as the markets tumble and inflation plagues the global economy. Since bitcoin hit an all-time high in November, roughly $2 trillion of bitcoin value—more than two-thirds of all prior crypto—has been erased.
The crypto market is no stranger to booms and busts, which are known as “winters” in the business. However, many investors and employees are experiencing this crypto downturn more severe than previous ones. Some cryptocurrency solutions and firms may no longer exist after the dust has settled.
The crash is having an impact on investors all over the world, including that in El Salvador. Bitcoin has been legal tender in Central America for nine months, and the country has invested millions of dollars.
However, the latest crypto crash has prompted more concerns about the regulation, especially after it was revealed that nearly $100 million in public money had been used to buy Bitcoin – each purchase greeted by the president with a tweet.
The government bought 2,300 bitcoins for $103 million in bitcoin dips. They are now worth half as much, owing to a decrease in the currency’s value. However, the finance minister has shrugged off the criticism, claiming that there is “extremely little fiscal hazard.”
However, President Nayib Bukele, a bitcoin enthusiast, remains optimistic. On Wednesday, Mr. Bukele indicated that El Salvador might buy more bitcoin. Despite Mr. Bukele’s enthusiasm, the ground reality in El Salvador does not appear to be encouraging for bitcoin adoption. According to a poll conducted by an El Salvadorian University, over 60% of the respondents still prefer to keep the dollar rather than bitcoin.
As the cascading effects of every new crypto market downturn play out, it’s hard to say when Bitcoin, Ether, and the entire cryptocurrency market will bottom out. With bitcoin and ethereum’s precipitous decline today, a significant loss is inevitable. Only time will tell how significant their loss affects the overall crypto industry.