Experts say investors lost confidence when the market capitalisation dropped below $900 million and over $100m of Bitcoin futures contracts were liquidated in the last 24 hours.
As a result of the wider crypto market carnage on the weekend, the biggest digital currency Bitcoin (BTC) broke the $19,000 level for the first time since December 2020, while second-ranking Ethereum (ETH) breached the psychological $1,000 mark.
Bitcoin is currently down about 10% and trading at $19,040, after making a low of $18,905, according to data from Coinmarketcap.
ETH is down around 10%, trading at $992, after making a low of $986.
The overall market capitalisation of cryptocurrencies has fallen by 5% in the last 24 hours and currently stands at $853 billion.
According to experts, the confidence level among investors dropped when the market capitalisation fell below $900 million and over $100m of Bitcoin futures contracts in the last 24 hours were liquidated.
According to Anndy Lian, Chairman, BigONE Exchange, BTC falling below the $20,000 range will lead to more liquidation triggers, especially for investors who are using leverage to short these positions.
“With the rising inflation, hiking interest rates, projected recession, ongoing war, and trying to recover from COVID-19 aftermath, BTC is being tested under all these factors for the very first time. In order for the BTC and crypto market to recover, we also need to have some certainty over these macroeconomic concerns,” Lian said.
Former CEO of BitMEX Arthur Hayes says massive sell pressure can be expected in the spot markets as key levels for BTC – $20,000 and ETH – $1,000 break, as dealers hedge themselves.We can also expect that there will be some OTC dealers that will be unable to hedge properly and might go belly up,” he says.
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