According to data from CoinMarketCap, Bitcoin dropped below $20,000 on Saturday morning. This is a level that is seen as important support for the largest cryptocurrency market. At the time this article was written, Bitcoin was trading for about $19,460, which was down more than 6% for the day.
Analysts worry that a drop below $20,000 could cause a wave of “forced liquidations,” in which large crypto investors are forced to close out their positions on BTC futures instruments because they don’t have enough collateral. These things are likely to make the price of Bitcoin go down even more, which will force more people to sell their Bitcoin.
At the time this was written, Ethereum was trading just above the support level of $1,000. It is now trading at $1,020.
All cryptocurrencies together are now worth about $853 billion, which is more than 5% less than it was 24 hours ago.
Arthur Hayes, the former CEO of BitMEX, says that if the price of BTC or ETH goes above $20,000 or $1,000, there will be “huge sell pressure.”
At the beginning of last month, major currencies fell along with the stock market, which caused cryptocurrency markets to crash. Both the stablecoin UST and the native token LUNA for Terra fell apart in less than a week, wiping out more than $40 billion in value.
Since then, both cryptocurrencies and tech stocks have been steadily going down. This drop has been sped up by investors pulling millions of dollars out of decentralized finance because they are worried about a worsening bear market.
On Sunday, the cryptocurrency lender Celsius stopped all customer withdrawals because it was afraid it wouldn’t have enough assets to handle a rush on the platform caused by the decoupling of the cryptocurrency stETH from ETH.
As the effects of each new drop in the crypto market continue to spread, nobody knows when BTC, ETH, and the rest of the crypto market will hit rock bottom.