Bitcoin (BTC) Tanks Another 9% to Fall Under $20,000 For the First Time Since 2020
The world’s largest cryptocurrency Bitcoin (BTC) faces yet another major price correction. Earlier today, June 18, the Bitcoin price tanked under $20,000 for the first since December 2020 i.e. after 550 days.
As of press tie, Bitcoin (BTC) is trading 8.27% down at a price of $19,233 with a market cap of $370 billion. With today’s price crash, Bitcoin takes its weekly losses to more than 30%. Under $20,000, the next significant support for Bitcoin is 10% lower at $18,000.
Bitcoin is not the only cryptocurrency facing selling pressure. The world’s second-largest crypto Ethereum (ETH) has also faced a brutal crash and is currently trading under $1,000 for the first time in 18 months. The ETH crypto has lost more than 75% of its price since the beginning of 2022. With the current crash in the ETH price, its market dominance has dropped to 14% from 20% at the start of 2022.
Some of the other top ten cryptocurrencies are down anywhere between 3-8%. The massive crypto market rout continues amid a turn of events in the crypto space.
The collapse of the Terra ecosystem in May 2022 followed by the liquidity crisis of the lending platform Celsius Networks has created intense selling pressure in crypto. At the same time, the third largest crypto venture firm - Three Arrows Capital - faces insolvency risks amid its excessive leverage positions and major liquidations done by its lenders. Zhu Su, the founder of Three Arrows Capital said that they are "in the process of communicating with relevant parties and fully committed to working this out”.
It looks like the macro environment in the crypto space doesn’t look good at all. The crypto lending and staking platforms have been facing light liquidity as investors have been pulling out money from the market.
On the other hand, the condition on Wall Street looks fragile for now. The U.S. equity market has been under a downward tailspin over the last week as the U.S, inflation soared to 8.6% and the Federal Reserve announced an 75 basis points interest rate hike last Wednesday.
Fed Chairman Jerome Powell said that they are committed to bring inflation down at any costs and that aggressive rate hikes could follow ahead this year. This is likely to create additional pressure on equity and also on risk-ON assets such as crypto.