Bitcoin dropped below $ 20,000 for the first time since December 2020 as evidence of strong pressure in the crypto industry continues to accumulate.
Highlights:
- The price of bitcoin has dropped below $ 20,000 for the first time since December 2020.
- Ether dropped below $ 1,000, reaching its lowest level since January 2021.
- Crypto investors face high-interest costs and increasing financial collapse.
Bitcoin dropped below $ 20,000 for the first time since December 2020. As evidence of deep-seated pressure in the crypto industry continues to accumulate due to fiscal tightening.
The price of bitcoin dropped by more than 6% in 24 hours to $ 19,149.60. According to Coin Metrics data. The last time bitcoin dropped below the $ 20,000 level was December 2020.
The biggest token in the market price dropped more than 9% to $ 18,740.52 early in the morning in London on Saturday, marking the 12th consecutive day in red according to Bloomberg data.
Ether broke $ 1,000 and dropped nearly 11% to $ 975.24, the lowest since January 2021.
“Investors continue to defend themselves following last year’s digital asset market,” Alkesh Shah, head of the crypto and digital assets strategy at Bank of America Corp., said in a statement on Friday.
“Although painful, removing bubbles from the industry may be healthy as investors focus on projects with clear road maps to revenue and profits compared to growth in revenue alone.”
The toxic mix of bad news cycles and high-interest rates has had a devastating effect on risky assets like crypto, which has slipped nearly 70% to Bitcoin from the highest ever in November.
The Federal Reserve raised its interest rate hike on June 15 by a third point – the largest increase since 1994 – and the central bank has signed an agreement to continue mounting this year in the fight against inflation.
Extensive signs of pressure 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.
In addition to the airwaves, the crypto hedge fund Three Arrows Capital lost considerably and said it was considering a sale or release of bail, while another lender, Babel Finance, followed in Celsius’ footsteps on Friday.
Even long-term owners who have avoided selling so far are under pressure, according to researcher Glass node.
“The growing fear of a recession is crippling the desire for assets at risk and that crypto trader are always on the lookout for buying Bitcoin at these costs,” Edward Moya, a senior market analyst at Oanda, told Thursday. “The flow of news has been bad for cryptos.”
Altcoins are also different from looking for sad investors after the collapse of Bitcoin. With all the tokens in the Bloomberg cryptocurrency trading platform in red.
Cardano, Solana, Dogecoin and Polkadot recorded a 24-hour fall of between 7% and 10% on Saturday, while privacy tokens like Monero and Zcash lost about 9%.
Stablecoins – a type of crypto asset identified in fiat currencies as the American dollar – are also heavily burdened.
Four stable currencies saw a trade surplus last week that was 4.5 times larger than last week, said Shah of Bank of America, who wrote prices eight out of 10 weeks ago.
Stablecoins are often trusted by crypto traders to transfer funds globally without the need to move out of traditional currencies. So, a continuous outflow indicates that investors are always safe, he added.
Even with a key rate hike of $ 20,000, historical data shows that Bitcoin can gain significant support for that brand. As previous trades show where the token tends to earn strong points, according to Mike McGlone, a Bloomberg Intelligence analyst.
Bitcoin could “build a base around $ 20,000 as it did about $ 5,000 in 2018-19 and $ 300 in 2014-15,” he said in a paper Wednesday. “Flexible inflation and rising prices are signs of a growing digital stock market value.”
The crypto market is now standing at its peak in late 2021 when Bitcoin trades close to $ 69,000. Traders pour cash into speculative investments of all currencies.
The market capitalization of cryptocurrencies was around $ 880 billion on Saturday morning, up from $ 3 trillion in November, according to price data from CoinGecko.
“The sentiment in the crypto market that anonymity is the most important at this time,” Ainsley To, Noelle Acheson and Konrad Laesser of Genesis Trading in a paper said on Thursday.
“The re-emergence of the risks of others is a reminder that not everything in risk management can be accurately measured. The danger is the only thing left after you have considered everything.”
