After Weekend Crash, Bitcoin Bounces Above $20,000, Ethereum Over $1,000
Coinspeaker
After Weekend Crash, Bitcoin Bounces Above $20,000, Ethereum Over $1,000
The world’s largest cryptocurrency Bitcoin (BTC) and the broader cryptocurrency market have recovered some of the major losses over the last weekend. As of press tie, Bitcoin (BTC) is up over 8% trading at $20,672 with a market cap of $395 billion.
The world’s second-largest crypto Ethereum (ETH) too follows with a 13% jump in the last 24 hours. With this, ETH has reclaimed its crucial support and is currently trading at $1,121.
The recent bounce back will certainly bring some sigh of relief after the brutal crash this month. Bitcoin continues to be on a downward momentum, contributed by multiple factors. Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, calls this a dead-cat bounce. “We’re oversold, so a bounce was expected,” he said. Ayyar further added that unless we reclaim $23,000, there’s no sign of a major trend reversal.
The meltdown of the global equity markets has certainly impacted the price of Bitcoin and the broader crypto space. However, the bigger factor has been the strong liquidations due to poor leverage conditions and over risks taken by the lender. In an email to CNBC, Charles Hayter, CEO of CryptoCompare, said:
“When inflation is on the doorstep and with rate hikes in the offing, the risks of a recession round the bend are high. The push me pull you of higher rates sapping cash from mortgaged house owners means people are psychologically bracing and paring back and digital assets are suffering thus. Coupled with this, the pull back in the digital asset ecosystem has uncovered a number of systemic issues.”
Bitcoin and Crypto Decouple from Equities
Bitcoin and the broader crypto market have major decoupled from US equities this month. In fact, they have corrected faster than those corrections in the US indexes. Here’s what exactly crypto-journalist Coin Wu has to say:
So far in June, the Nasdaq 100 has fallen about 11.4%, Bitcoin and Ethereum has fallen 35.8% and 44.5%. Before June 11, the correlation between the US stock and the crypto was similar. After that, due to the liquidation of institutions, the crypto market fell sharply. pic.twitter.com/VqCvEJ8foh
— Wu Blockchain (@WuBlockchain) June 19, 2022
Historically, stocks and bonds are in for their worst quarter ever and so could be Bitcoin. The world’s largest crypto can continue to be under selling pressure as far as the global macros remain bleak.
On the other hand, with the crypto market is facing serious issues of overleverage and liquidations forcing the lenders to sell. One of the recent cases after Terra’s collapse has been the Celsius Networks’ liquidity issues. Crypto market analyst Mike Alfred writes:
“Bitcoin is not done liquidating large players. They will take it down to a level that will cause the maximum damage to the most overexposed players like Celsius and then suddenly it will bounce and go higher once those firms are completely obliterated. A story as old as time”.
The bigger question is how far Bitcoin can collapse from here. Is $13K on the cards?
After Weekend Crash, Bitcoin Bounces Above $20,000, Ethereum Over $1,000