On Saturday, Bitcoin deceased below $20,000 for the first time, after a span of more than a year and half. The crypto industry has recently been under excessive stress, and it’s no surprise that Bitcoin has performed so poorly since December 2020. The global economic backdrop due to the Russia-Ukraine war has led to monetary tightening of the crypto market.
At around 2:54 PM Hong Kong time on Saturday, Bitcoin fell to $19,377.08, denoting a drop of 6% of the entire crypto market. It is for the first time that the largest crypto token has fallen consecutively for the 12th day now. Besides Bitcoin, Ether fell below the $1000 mark by exactly trading at $999.86 – the lowest value since January 2021.
The senior market analyst of Oanda, Edward Moya commented on the recent toll of the crypto market. Here is what he said: “Surging recession fears are crippling appetite for risk assets and that has crypto traders remaining cautious about buying Bitcoin at these lows.”
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Recently, on 15th June, 2022, the Federal Reserve raised its interest rates by percentage point of three quarters – the highest hike since 1994 – and alongside them, central banks hinted towards the aggressive push of inflation rate. Such developments, along with higher-rate environments, have led to extensive risk associated with assets like crypto. Bitcoin consists of more than 70% slide in the overall market.
The global monetary market has witnessed widening of economic pressure and has undergone broader distress than was expected when it started sliding down in 2021. The collapse of the Terra block chain and the recent crisis in the crypto market will further widen the economic pressure.
This downfall has affected all investors quite firmly; even long term asset holders, who have avoided selling their assets for quite long, are now considering it as the tension lurk over the market until now, and most probably will continue doing so.
However, despite piercing of the crypto market, analytics hint towards Bitcoin finding support of around $20,000 with previous sells demonstrating dire points of resilience and recovery.
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A Bloomberg Intelligence analyst, Mike McGlone, reacting to the volatility of market said, “Bitcoin may build a base around $20,000 as it did at about $5,000 in 2018-19 and $300 in 2014-15. Declining volatility and rising prices are earmarks of the maturing digital store-of-value.”
According to data produced by Coin Geko, the total market cap of the crypto market stands at $900 billion now, which earlier was $3 trillion in November 2020. This figure surely hint towards the concerning economic environment of the world.
