March 31, 2023

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Briefly –

  • Bitcoin saw its price losing 9% within the last day to explore sub-$19K, navigating levels never seen since December 2020.
  • ETH, the 2nd-largest crypto, lost 10% to $997, the lowest since January 2021.
  • Crypto traders struggle with hawkish interest rate increases from the US Fed and deteriorating liquidity.

Amplified bearish sentiments in the crypto spectrum dragged Bitcoin beneath the $20K level on Saturday, stretching the brutal crash. The bellwether crypto lost 9% within the last day to explore sub-$19K. While writing this content, Bitcoin trades at $19,040 (Coinmarketcap data). That had the crypto hitting levels seen two years ago.

Moreover, the altcoin market endured a massive hit. Ethereum, the second-largest crypto by value, lost more than 10% to $996.01, the lowest since January last year. Meanwhile, crypto investors battle with aggressive interest rate surges from the US Fed Reserve plus fading liquidity crunch that has top players into monetary challenges.

The developments emerged as the crypto space nursed the $60 billion (last month’s) loss of two leading tokens. The Terra stablecoin lost the crucial $1 peg, crashing the LUNA token. The crypto space contemplated the developments as this week saw the $3B crypto lending platform Celsius halting withdrawals. Locking investor funds raised concerns of insolvency.

Celsius serves as a bank, lending users crypto to institutions to accumulate profits on deposits. The platform holds most assets in the DeFi network. Celsius, claiming to act in the community interest, could not respond to massive requests for comments.

Another crucial player, Three Arrows Capital, battles a liquidity crisis. Its $10B cryptocurrency hedge finds could undergo insolvency as the crypto market crash reduces its holdings. 3AC invested in Terra and conducted several leveraged bets on multiple tokens, including Solana, Ether, and Bitcoin.

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Where Is Bitcoin Heading

Analysts see Bitcoin bottoming around $15.5K. A cryptocurrency trader Rekt Capital stated that Bitcoin would likely form a low at $19K or $15.5K (according to BTC’s historical stats on weekly MAs). Surprisingly, BTC’s latest move broke a significant milestone. The freefall saw the leading crypto breaching its 2017 ATH of $19.7K. Sentiments around BTC remain weak, and the crypto might extend lower in the coming sessions.

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