Bitcoin price today dropped below $19.000, a feared milestone seen as a crucial support level for the top cryptocurrency. At the time of writing, Bitcoin is trading at around $19.200, down more than 6% on the day.
In the last Bear Markets Bitcoin had never dropped below the $20.000 zone. For many specialists in cryptocurrency market a dip below that level could trigger yet another sell-off, in which large-scale cryptocurrency investors will be forced to close positions in BTC derivative products because they now have insufficient collateral. Such events would likely only further reduce the Bitcoin price, triggering new liquidations in the market.
Bitcoin stayed above $20.000 throughout the 2021 bull run, peaking at $69.000 in November 2021. It is now over 70% below its high. Following Bitcoin, Ethereum tries to hold above its main $1.000 support level, albeit fractionally; it currently trades at around $997.
Contributing factors to the crypto market's decline this week were Celsius which froze customer withdrawals as it struggled with insolvency before Three Arrows Capital, one of the most respected hedge funds in the industry, went into overdrive. its own liquidity crisis.
The hedge fund co-managed by Su Zhu and Kyle Davies previously held more than $10 billion in assets under management and is now rumored to be on the brink of insolvency after a series of margin calls due to over-leveraged trading during the market downturn.
Babel Finance, an institutionally focused lending platform, also halted withdrawals due to low liquidity.
The latest drop comes against the backdrop of a precarious macroeconomic environment that has seen the Federal Reserve commit to raising interest rates throughout this year as it battles rising inflation. The cryptocurrency market is down over 5% in the last 24 hours, with the total market capitalization around $853 billion.
