- The Bitcoin price fell below $20,000 this morning.
- The rising interest rate pressure and the failure of various companies can be identified as the reason for the slump.
- In addition, the weekends are characterized by low liquidity, which makes it easier for the bears to push the price.
The magic limit of $ 20,000 has fallen and Bitcoin has experienced a historic price slump. Because so far, the low after a bull market has never fallen below the high from the previous one. This breaks the previous pattern of recurring cycles that produce a bull market every 4 years, at least in this respect.
At the time of writing, BTC is around 19,000 US dollars and is therefore below the high of 2017. This only makes further price slumps more likely and reduces expectations and price targets. While some analysts assume that a bottoming out can be achieved at about $ 13,000, the situation is crying out for a rebound.
After all, neither a short squeeze nor a bear market rally turned out, and the price crashed without any significant correction since June 9.
Crypto Industry Is Shrinking Tremendously
The price slump also seems to have caught the crypto hedge fund Three Arrows Capital ice cold. According to several consistent media reports, 3AC’s positions were liquidated. Accordingly, the company is said to have gambled so much that it is threatened with insolvency. Other companies, such as derivatives exchange Deribit, which are related to 3AC, assured that the situation has no effect on their business.
Overall, one gets the impression that the crisis around Celsius and the resulting price slumps have had a painful effect on the companies active on the market. There has also been a wave of layoffs at stock exchanges and brokers, which leaves a particularly bitter aftertaste. For example, Coinbase is said to have parted with employees practically overnight, in order to reduce the staffing by 18%.
Why is the market continuing to collapse?
On the one hand, the rate hikes of the Fed and other central banks have a sensitive effect on the market. Another problem is the unclear situation of Celsius, because in the event of insolvency, the market is threatened with the next GAU directly after Terra.
In the current situation, it is only likely that more and more investors will or will have to partially repel their coins and tokens. This is especially the case for all funds that rely on liquidating assets for cash. Due to the ever-increasing selling pressure, cascading liquidations can eventually occur and thus further price slumps. In principle, this spiral can only be stopped if demand increases drastically or the majority has been liquidated.
This effect is particularly problematic on weekends, because then there is less liquidity in the market. Therefore, the crypto market is currently in an extremely difficult situation, because there is a shortage of buyers.
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