Bitcoin fell to a new significant low in the current bear market.
On Saturday morning, Bitcoin fell below $20,000, according to data from CoinMarketCap– a step considered a crucial support level for the first cryptocurrency by market capitalization. At press time, Bitcoin is trading at around $19,460, down more than 6% on the day.
Although BTC above $20,000 is a largely symbolic barrier, experts estimate a drop below this level could trigger a wave of “forced liquidations”, in which large crypto investors will be forced to close their positions in BTC derivatives as they now lack sufficient collateral. Such events would likely only drive the price of Bitcoin further down, triggering further sell-offs.
At the time of publication, Ethereum, remains above the $1,000 support level, albeit slightly; it is currently trading at around $1,020.
The total market capitalization of all cryptocurrencies currently stands at around $853 billion, down more than 5% in the past 24 hours.
According Arthur Hayesformer CEO of BitMEX, $20,000 and $1,000 represent price levels for BTC and ETH respectively, which if breached would trigger “massive selling pressure.”
If these levels break, $20,000 $BTC & $1,000 $ETH, we can expect massive selling pressure in spot markets as dealers hedge. We can also expect that there will be OTC dealers who will not be able to hedge properly and may go bankrupt.
Crypto markets plunged early last month as major coins fell in correlation with the stock market. In one week, Terra stablecoin UST and LUNA native token both implodedwiping out some $40 billion in value.
Since then, cryptocurrencies have been steadily falling along with tech stocks, a downturn accelerated by investors withdraw millions of dollars from decentralized financeamid fears of a deepening bear market.
On Sunday, crypto lender Celsius suspended all customer withdrawalsfearing that the company has insufficient funds to cover a run on the platform from the depegging of the stETH cryptocurrency from ETH.
As the cascading effects of each new crypto market downturn continue to unfold, it remains unclear when BTC, ETH, and the broader crypto market will hit the proverbial bottom.
Want to be a crypto expert? Get the best of Decrypt straight to your inbox.
Get the biggest crypto news + weekly digests and more!