Bitcoin also dropped to around $17,750 for the first time since December 2020 on Saturday afternoon, as the sell-off in the cryptocurrency market intensified.
Bitcoin price is still falling steadily and is currently testing the all-time high of 2017 from $17,000 to $20,000. However, the drop shows no sign of abating, and analysts aren’t entirely sure of a bottom call at this time.
In the next hour, Ethereum followed suit and fell below $1,000. These numbers were feared to be crucial support levels for the top two currencies by market capitalization.
The next few days could be crucial for Bitcoin, as failure to establish support in this position could lead to a further decline in the market to the $15,000 level.
Alternatively, if the price recovers from the current area, the $24,000 level will be the first hurdle ahead of the $30,000 key resistance and the 50-day moving average.
The current Crypto Winter differs from 2018 in that cryptocurrencies are declining along with tech stocks as the broader economy is fragile, inflation is rising, and an all-out recession appears imminent.
This year's Crypto Winter is different from last year's because cryptocurrencies and tech stocks are both in decline. Image: CNBC.
Over the past week, the price of bitcoin has fallen by more than 30 percent, and the market can be said to be experiencing the most extreme levels of anxiety. A large amount of currency that was bought and held over the past two years is in circulation, as evidenced by the exchange inflows.
On Friday, Anthony Trenchev, founder of crypto bank Nexo, stated on Bloomberg that the current recession “reminds me of the bank panic of 1907.”
On Saturday, Dan Heald, Kraken’s director of growth marketing and Bitcoin influencer, warned, “We’re on a path of extreme pain.”
Bitcoin’s decline occurred over a period of several months, and in recent weeks it was accelerated by the collapse of two major cryptocurrency projects, Terra-Luna and Celsius, which raised concerns about the health of the market.
BTC total market cap at $350 billion on the weekend chart | Source: TradingView.com
The pressure from macroeconomic factors such as rising inflation and a series of interest rate hikes by the Federal Reserve is also contributing to the disaster in the cryptocurrency market.
Market watchers have been keeping a close eye on the top-tier cryptocurrency as they track stocks down. It doesn’t help that crypto companies are issuing pink coupons and putting a large number of people out of work, and that some of the most popular brands in the industry are facing a solvency collapse.
Meanwhile, recent data from analytics website Glassnode indicates that revenue from Bitcoin mining has continued to decline. With mining costs rising and the macroeconomic environment deteriorating, miners are now less motivated and profitable.
Featured image by Domestika, diagram from TradingView.com