Bitcoin further sank to about $17,750 for the first time since December 2020 Saturday afternoon, as the selloff in the crypto market intensifies.
Bitcoin’s price is still falling steadily and is currently testing the 2017 all-time high range of $17,000 to $20,000. However, the descent shows no indication of abating, and analysts are are not quite sure to call a bottom at this time.
The following hour, Ethereum followed suit and went below $1,000. These numbers were feared as crucial support levels for the top two coins by market capitalization.
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The next several days could be crucial for Bitcoin, as a failure to establish support at this position could lead to a further market decline into the $15,000 mark.
Alternatively, if the price recovers from the current region, the $24,000 level would be the first hurdle before the key $30, 000 resistance and the 50-day moving average.
The current Crypto Winter differs from 2018 in that cryptocurrencies are falling alongside tech stocks as the broader economy is fragile, inflation is soaring, and a full-scale recession appears impending.
This year's Crypto Winter is different from last year's because cryptocurrencies and tech stocks are both in decline. Image: CNBC.
During the past week, the price of Bitcoin fell by more than 30 percent, and the market is arguably suffering maximum anxiety. A significant amount of coins that have been purchased and held over the past two years are being put into exchanges, as indicated by exchange inflows.
On Friday, Antoni Trenchev, the founder of cryptocurrency lender Nexo, stated on Bloomberg that the current slump “reminds me of the 1907 bank panic.”
Saturday, Kraken’s director of growth marketing and Bitcoin influencer Dan Held warned, “We are on the path of maximal pain.”
Bitcoin’s decline occurred over the course of several months, and was hastened in recent weeks by the collapse of two major cryptocurrency projects, Terra-Luna and Celsius, which further sowed worries about the market’s durability.
BTC total market cap at $350 billion on the weekend chart | Source: TradingView.com
Pressure from macroeconomic factors, such as growing inflation and a series of interest rate hikes by the Federal Reserve, also contributes to the calamity on the cryptocurrency market.
Market observers have also been keeping a close eye on top-tier cryptocurrencies as they track equities lower. It doesn’t help that crypto companies are issuing the pink slips and rendering a large number of people jobless, and that some of the industry’s most recognizable brands are facing solvency breakdowns.
Meanwhile, recent data from the analytics website Glassnode indicates that the revenue generated by Bitcoin miners has continued to decline. With rising mining expenses and a deteriorating macroeconomic environment, miners are now less motivated and profitable.
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Featured image from Domestika, chart from TradingView.com