May 21, 2024

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Bitcoin price drops below $20,000 as cryptocurrency sell-off deepens

Bitcoin price drops below $20,000 as cryptocurrency sell-off deepens

Bitcoin price drops below $20,000, below the level widely watched by crypto enthusiasts, Brutal selling in cryptocurrency It showed no signs of backing down.

Bitcoin dropped to $1,701.58 and stayed below $20,000 on Saturday afternoon, according to CoinDesk, down about 15% from its price at 5 p.m. ET on Friday. He. She It lost 74% of its value from its highest in November.

Concerns about the Federal Reserve Measures to tame higher-than-expected inflation rates It pushed both stocks and cryptocurrencies into a bear market. The big names in the industry, including

Coinbase Global a company ,

The largest cryptocurrency exchange in the United States, They recently announced job cuts.

“Bitcoin’s break through the $20,000 price level was close, given the pessimism we feel in the market,” said Naim Aslam, market analyst at AvaTrade. He said that the repercussions of the collapse of the stablecoin Terra USD in May will continue to spread, and this leads to depression.

There is no definite significance of the $20,000 level, but the price fell below $19783, the previous high of 2017, according to Coinbase. Bitcoin bulls have always believed that the cryptocurrency has entered a new phase of development and acceptance in recent years, and that it will not fall below the level of 2017.

Yuya Hasegawa, market analyst at Japanese crypto exchange Bitbank Inc. People will lose faith in the crypto market as a whole, but seasoned investors in cryptocurrency who believe in their abilities. His long-term prospects, he said, will see an opportunity to buy at discounted prices.

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For Wayne Sharp, a retired investment advisor in Columbus, Ohio, the tumbling crypto market came as no surprise. She bought about $10,000 worth of bitcoin in 2020, and she’s been sitting on it ever since, with no plans to sell or buy more. “I’ve seen a lot of cycles. I’ve been watching this for 45 years,” she said. “Humans make the same mistakes over and over again.”

Ether, another major cryptocurrency, fell below $1,000 on Saturday, trading as low as $880.93, according to CoinDesk, its lowest level since January 2021.

Bitcoin Slipping off its record high $67,802 in November contributed to a Survey of nearly 2 trillion dollars in the broader market. The total market capitalization of Crypto, which peaked in November at nearly $3 trillion, reached about $834 billion on Saturday — its lowest level since January 2021, according to data provider CoinMarketCap.

Bitcoin traded around the $30,000 mark for most of May before dropping sharply again in June after that new inflation shock And concerns about rising US interest rates. Investors have dumped assets that are seen as risky, such as cryptocurrencies and technology stocks.

Margin calls have been received by retail investors, with about $460 million in collateral pledged by some 132,000 retailers in the past 24 hours, according to data provider CoinGlass. That compared to $1 billion earlier this week.

An increasing number of previously high-end crypto companies are feeling the pain of what is being called “crypto winter.” Cryptocurrency bank Babel Finance told customers on Friday that it was Suspension of refunds and withdrawals from all products, citing “extraordinary liquidity pressures”. One of the largest cryptocurrency lenders, Celsius Network LLC, Users are not allowed to withdraw funds For about a week, mentioning harsh market conditions.

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The crypto-focused hedge fund is owned by Three Arrows Capital Ltd. Appointment of legal and financial advisors To help find a solution for investors and lenders after experiencing huge losses from a massive market sale of digital assets, the company’s founders told the Wall Street Journal.

Ryan Shea, an economist at crypto investment firm Trakx, said a sudden squeeze in disposable capital, often called liquidity, is exacerbating the sell-off, which is not something that can be easily fixed. Unlike traditional markets, “there is no central bank to step in and interview, the process has to take place,” he said.

The surge in cryptocurrency valuations over the past two years has helped Big Name Investments From companies like

Tesla a company

And the period of low interest rates during the pandemic encouraged individuals stuck in their homes to buy riskier assets in the hope of achieving greater returns.

interest rates increase Now being enacted by the Federal Reserve comes at a time when explosions in some crypto projects have spread across the ecosystem. The so-called Stablecoin TerraUSD broke from its $1 peg last month after intense selling pressure, leaving it and its native sister coin Luna. Now it’s almost worthless. While its developers sought to defend the TerraUSD peg, they sold off bitcoin reserves, affecting its price and other assets.

Recently, cryptocurrency investors have become concerned about a derivative of crypto-ether being locked in until the Ethereum network moves to a less power-hungry model. The so-called Lido-staked ether was traded at a discount against the same ether recently.

“Crypto has enough problems. It doesn’t need the macro,” said Noel Acheson, head of market insights at crypto lender Genesis Global Trading, referring to rising interest rates and inflation concerns.

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write to Eileen Yu at [email protected] and Kaitlin Ostroff at [email protected]

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