Bitcoin approaches the $20,000 mark a 30% drop for eight straight days
- Bitcoin continues to tumble this week to trade just above $20,000
- Ethereum (ETH) drops to over 15%
Bitcoin price reached $20,000 in European hours on Wednesday, continuing a 12-week slide amid weakening macroeconomic sentiment and crypto market contagion risk.
On Tuesday, Bitcoin hit a low of $22,000 in just a few hours in the United States. The cryptocurrency dropped steadily on Wednesday morning, with Bitcoin falling below $21,000 for the eighth time and losing 30% over the past week.
Bitcoin has plummeted 70% since its all-time high of approximately $69,000 in November last year, according to data from crypto exchange Coinbase.
“A decline below $20,000 would be a major psychological blow and might push bitcoin into a tailspin,” says Craig Erlam, a foreign exchange firm senior market analyst at Oanda.
Ethereum (ETH), the second-largest cryptocurrency, has also dropped over 15% and is now trading at $1,118.66 at the time of writing. According to CoinMarketCap, Ethereum’s current market capitalization is $128.79 billion, with a loss of almost 80% since its all-time high of $4,891.70 in November 2021.
To address concerns about the firm’s liquidity, Celsius halted all withdrawals earlier this week, citing “unprecedented market conditions.” Three Arrows, a prominent crypto fund, has had to sell significant key positions this morning due to at least $400 million in liquidations.
The firm informed its 1.7 million clients that it has “decided to stabilize liquidity and operations while we undertake measures to safeguard and protect assets.” It warned that it would take some time before customers could withdraw their deposits again.
Investors remain bearish in their sentiments about the bitcoin
According to FxPro’s Alex Kuptsikevich, concerns over a stringent increase in monetary policy weigh on financial markets. They are flowing down into cryptocurrencies via their effect on big institutional investors. “It’s not surprising that bitcoin and ether are dragging the entire cryptocurrency market down in this scenario,” he added.
According to a May CPI report, inflation in the United States has risen to 8.6 percent, 0.3 percentage points above the expected 8.3 percent level. As investors priced in further rate hikes as the Federal Reserve (Fed) attempted to bring costs under control, data from around the world sent global markets tumbling earlier this week.
Coinbase said it would let go of about 1,000 employees, roughly 18% of its staff, owing to concerns over an economic downturn and a “crypto winter.” Since its IPO in April, the company’s stock has been beating. It is now worth less than $12 billion, down from almost $100 billion.