Bitcoin Crashes Below 20,000 For The First Time Since 2020

Bitcoin dipped below $20,000 for the first time since December 2020 as evidence of mounting stress within the cryptocurrency industry continues to mount against a backdrop of monetary tightening.

The largest token by market value fell more than 9% to $18,740.52 in early morning London on Saturday, marking a record 12 consecutive days in the red according to data from Bloomberg.

Reading: Bitcoin crashes below as

ether broke above $1,000 and fell almost 11% to $975.24, the lowest level since January 2021.

“Investors continue to position themselves on the defensive following last year’s liquidity-driven bull market for digital assets,” Alkesh Shah, head of crypto and digital assets strategy at Bank of America Corp, said in a note on Friday.

“As painful as it may be, de-foaming the sector is likely to be healthy, as investors will shift their focus to projects with clear roadmaps for cash flow and profitability versus revenue growth.”


A toxic combination of bad news cycles and higher interest rates has been detrimental to riskier assets like cryptocurrencies, contributing to a roughly 70% drop in bitcoin from its all-time high in November.

The Federal Reserve raised its prime rate on June 15 by three-quarters of a percentage point, the biggest increase since 1994, and central bankers have signaled they will continue to hike aggressively this year in the fight to control inflation.

See also: The BSI Crypto Trading Indicator – Combining Technical Analysis and On-Chain Analysis – Moralis Academy

Wider signs of stress emerged with the collapse of the terra blockchain last month, and worsened this week following the recent decision by crypto lender celsius network ltd. to stop withdrawals.

Adding encouragement, cryptocurrency hedge fund three arrows capital took heavy losses and said it was considering asset sales or a bailout, while another lender, babel finance, followed in celsius’s footsteps on Friday. Even long-term holders who have so far avoided selling are under pressure, according to researcher Glassnode.

“Rising recession fears are crippling risk appetite and that’s keeping crypto traders cautious about buying bitcoin at these lows,” edward moya, senior analyst at bitcoin, said in a note Thursday. oanda market. “the news flow has been terrible for crypto.”

altcoins were no exception to investors’ sour appetite following bitcoin’s crash, with all tokens on the bloomberg cryptocurrency monitor trading in the red.

cardano, solana, dogecoin, and polkadot saw 24-hour declines of between 7% and 10% on Saturday, while privacy tokens such as monero and zcash lost as much as 9%.

Stablecoins, a type of crypto asset pegged to the value of a fiat currency like the US dollar, have also struggled.

The four major stablecoins experienced net outflows from trading last week that were 4.5 times higher than the previous week, the shah of bank of america said, having posted net outflows in eight of the previous 10 weeks.

Cryptocurrency traders often rely on stablecoins to move funds around the ecosystem without needing to exit to traditional currencies, so persistent outflows indicate investors remain on the defensive, he added.


See also: How Bitcoin Became the Leading Cryptocurrency

Even with the key $20,000 level broken, historical data shows bitcoin may find key support around that mark as previous sell-offs demonstrate where the token typically finds resilience, according to Mike McGlone, Analyst of intelligence of bloomberg.

Bitcoin can “build a base around $20,000 as it did around $5,000 in 2018-19 and $300 in 2014-15,” it said in a note on Wednesday. “Decreasing volatility and rising prices are signs of the digital store of value maturing.”

The crypto market is now at a fraction of its late 2021 heights, when bitcoin was trading near $69,000 and traders poured cash into speculative investments of all kinds.

The total market capitalization of cryptocurrencies was around $880 billion on Saturday morning, down from $3 trillion in November, according to coingecko price data.

“The sentiment in the crypto markets is that the unknown unknowns are the most significant right now,” said ainsley to, noelle acheson and konrad laesser of genesis trading in a note on Thursday.

“The resurgence of counterparty risk is a reminder that not everything that matters in risk management can be accurately quantified. risk is what remains after you think you’ve thought of everything.”

-with the help of emily nicolle and suvashree ghosh.

(Except for the headline, this story has not been edited by ndtv staff and is published from a syndicated feed).

See also: Bitcoin Miners Could Save the Texas Grid—or Sink It – Texas Monthly

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