Digital currencies continued to trade on Tuesday, with the value of bitcoin falling below $ 21,000 for a short time. Bitcoin fell to $ 20,834.50 and reached about $ 22,300 as of 5:30 a.m. Tuesday. The fall is still 4.2 percent lower than on Monday, when it reached its lowest level since March 2020.
The price of bitcoin fell with the liquidation of billions of dollars
The wider stock market as well as digital currencies have been under pressure. The fall comes amid concerns that higher interest rates from key central banks could curb easy monetary policies that have bolstered speculative assets. This week’s immersion in digital assets has lowered the overall value of the digital currency market to below $ 1 trillion for the first time since 2021.
Companies trading in bitcoin and related fields are starting to suffer as digital currency prices continue to fall. This has exacerbated the severe market downturn. The current market climate is one of the warnings. However, is this typical for the bitcoin ecosystem?
The price of bitcoin has been very volatile. The first significant increase in the price of this crypto occurred in 2010 when the value of a single bitcoin rose from less than a penny to $ 0.09. Since then, BTC has had several ups and downs as it came into being. Its ups and downs are similar to the Wild West, and investors are never sure what to expect.
Bitcoin price fluctuations show investors’ optimism and frustration with this promise. Satoshi Nakamoto, the nickname used by the anonymous inventor (s) of bitcoin, coined it for day-to-day purchases as a way to circumvent traditional banking systems after the 2008 financial crisis.
Suddenly, between January and May 2022, the price of Bitcoin gradually declined, closing at $ 47,445 by the end of March and falling to $ 28,305 on May 11. This was the first time since July 2021 that closing prices were below $ 30,000. . On June 13, the price of crypto fell sharply, with Bitcoin falling below $ 23,000 for the first time since December 2020.
The current crypto recession is different. Unlike previous crashes, the entire digital currency market faces opposition, criticism and regulatory concerns. Bitcoin and Altcoins fell at the same time as US stocks after Wall Street opened on June 13 as sales began before the weekend.
During trading on Monday, the S&P 500 lost 3.9% and the Nasdaq Composite Index 4.7% before the US Federal Reserve made significant statements about its anti-inflation policy. The cryptocurrency market was hit hard and the bitcoin / US dollar fell 22.4% from the beginning.
On Monday, cryptocurrency lender halted withdrawals, adding to the stress of the digital currency industry. The freeze was just another crisis that shook the market less than a month after the collapse of the StableCoin Terra. On Monday, news of Celsius’ decision lowered the total value of the crypto market to below $ 1 trillion for the first time since January 2021, to $ 977 billion.
The drop in Celsius has not been good news for the digital currency market. Traders are wary of MicroStrategy Inc., which has a problem with its bitcoin gambling. The company has amassed a large number of bitcoins, and if the price reaches the critical range it identified last month, it will certainly have to send additional collateral for the loan.
Will BTC survive the current market crash?
With the intensification of global monetary policy in response to inflation and the depletion of markets, digital currencies have become a representative of escaping speculative assets. Every diver raises this ghost whether it is time to enter the trade or not, because there may be an imminent decline.
More than $ 1.1 billion was liquidity in cryptocurrencies on Monday – about $ 685 million on the long side and $ 468 million on the short side, according to Coinglass. According to Coinglass, this is the highest rate for both short and long pants in at least the last three months.
According to some traders, investors seem to be selling in bulk, which has caused the crypto market to collapse. As seen in stock markets, investors are also avoiding riskier assets.
The current downturn in the market has provided a new level of competition for Bitcoin and raised the prices of its top competitors. Although altcoins have historically performed less well than bitcoins, things are different now that they are under increasing regulatory pressure. According to some experts, only a small percentage of altcoins will survive such market fluctuations.
The digital currency market suffered a sharp shock this morning. Users flocked to Twitter to express their dissatisfaction (or in some cases, happiness) with the current state of digital currencies. Whales and ex-whales have started talking because they realize that they have lost a significant portion of their wealth.
When it comes to predicting the price of a bitcoin floor or whether key trend lines are supported by some experts, all bets are in vain. Rekt Capital noted that the 200-week simple moving average (SMA) at $ 22,400 was not accompanied by a significant volume gain, meaning that lower levels could be tested.
Following its previous record high in November, it was easy to predict the $ 100,000 price of Bitcoin by the end of last year. It is even more difficult to predict the price of Bitcoin, as it has dropped significantly.
According to the strongest opponents of Bitcoin, the digital currency will fall to $ 10,000 by 2022. However, a midpoint may indicate that it could still rise to $ 100,000, like many experts late last year – in a delayed timetable.
Many experts are skeptical about the forecast, but point to the long-term trend of bitcoin appreciation. While traders and whales in the bitcoin market are confident that bitcoin is not getting anywhere, it does not mean that they should sit back and watch the value fall. They have been there before and they are back and they will do it again.
Another factor that drives the price of bitcoin is the number of new consumers who buy and learn about digital currency. The exponential growth of new acceptance may continue to increase the value of bitcoin.
Another critical factor affecting the price of bitcoin is the cycle that is being halved and is expected to occur in less than two years. Halving has historically been associated with high and low economic cycles. For now, however, bitcoin is awaiting execution, and investors are losing hope amid fears of a recession.