The cryptocurrency Bitcoin continued its price slide over the weekend and at times fell significantly below the important mark of 20,000 dollars. The oldest and best-known cyberdevise only cost $ 17,649 at times on Saturday, about 14 percent less than on Friday and as little as it has not cost in 18 months. In November, a Bitcoin with around $ 68,000 was still almost four times as expensive, since the beginning of the year, the value has fallen by more than 60 percent. The cryptocurrency Ethereum lost 73 percent in the period. On Sunday, the price recovered to around $ 19,500, but did not make up for Saturday’s losses.
“Breaking the $20,000 mark shows that confidence in the crypto industry has collapsed,” said Edward Moya, market analyst at The Americas OANDA. “There are too many cryptocurrencies and crypto exchanges that are under enormous financial pressure in view of the cost of borrowing,” he said, referring to rising interest rates. Many retail investors who had invested their money in cryptocurrencies would now be permanently scared away. The price slide is accompanied by significant losses on the global stock markets due to fears of a recession.
Jochen Stanzl, chief market analyst at CMC Markets, had only a few days ago referred to a general sell-off on the risk markets. If Bitcoin does not rise to almost $ 33,000 at the end of the month, there is a risk of another crash to the 10,000 mark from a technical point of view.
The industry analyst Timo Emden said on Sunday that the mixed situation is still fragile from a fundamental and chart-technical point of view. There can be no talk of a serious recovery. “However, a capitulation of the investors and thus all the losses on Bitcoin & Co remain premature at this point.” In view of an oversold market situation, a strong countermovement is in the air. However, the effects of the ongoing price declines are now likely to have finally arrived at the Bitcoin manufacturers (miners). For many, the bill is no longer going up, which pushes the concern of a final capitulation of a large part. If prices fall even lower, the trend is likely to intensify. “Only a few farms could survive.” The industry suffers from high energy costs. By selling the Bitcoin holdings, the miners could try to cover their expenses.
In the market for cyberdevices, investors had also recently been concerned about the situation of Celsius Networks, a provider of cryptocurrency loans. Celsius had declared to suspend withdrawals and transfers between accounts in order to stabilize liquidity and operations. The company lends digital money, issues loans secured with cryptocurrencies and offers savings products for customers who invest their cyber currencies with the company. On its website, the company advertises with annual returns of up to 17 percent.
There were fears in the market that other companies in the industry would be dragged into the abyss. One problem was that companies like Celsius operated in a grey area, Matthew Nyman of the law firm CMS had explained. Unlike traditional banks, they are not subject to any clear regulation with corresponding disclosure obligations.
Several companies in the industry have announced the dismissal of thousands of employees. Against this background, investors have recently also parted ways with stocks from the cryptocurrency sector and with companies that deal with the blockchain technology underlying crypto currencies.
