Bitcoin Price Struggles to Hold $20,000 Mark, Keeps Crypto Market on Edge

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Bitcoin price struggled to stay above the closely-watched $20,000 level, extending a period of marked volatility that saw huge weekend swings.

Bitcoin price struggled to stay above the closely-watched $20,000 level, extending a period of marked volatility that saw huge weekend swings.

The largest cryptocurrency fell as much as 4.8% on Monday and was trading at $19,914 as of 7:32 a.m. in London. Ether at one point shed 7.8% but held above $1,000. Altcoins like Solana, Cardano and Dogecoin declined.

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Bitcoin sank almost 15% on Saturday, then vaulted back above $20,000 with a surge surge of similar magnitude on Sunday. The pattern of swings suggest investor sentiment remains highly fragile as the Federal Reserve and other central banks go full throttle to fight inflation with interest-rate hikes that drain liquidity from markets.

The T3 Bitcoin Volatility Index, a measure of the token’s expected 30-day volatility, has jumped back to the highs of mid-May, when the collapse of the TerraUSD stablecoin rocked markets.

“A toxic mix of bad news cycles and higher interest rates has hurt the crypto market and we can anticipate more volatility in the upcoming weeks,” said Feroze Medora, director of APAC trading at Cameron and Tyler Winklevoss’s Gemini crypto platform, in a note on Monday.

As Bitcoin crashed below $20,000 last week for the first time since late 2020, attention has turned toward a cascade of liquidations that threaten to worsen the crypto rout. There were a total of $879 million worth of liquidations over the weekend, data from Coinglass shows. ‘Chasing Liquidations’ Current trading patterns in Bitcoin and Ether indicate some large crypto holders are “chasing liquidations to profit from forcing other players out,” said Chiente Hsu, chief executive officer of decentralized finance platform ALEX.

Adding to the uncertainty is the intense pressure on DeFi applications. Their popularity as a source of high yields soared when pandemic-era stimulus drove a record-breaking crypto boom.

Now they are being forced to take unprecedented measures to protect themselves against a chain reaction of liquidations. Embattled crypto lending platform Celsius Network Ltd. said Monday it needs more time to stabilize its liquidity and operations after freezing deposits earlier in June.

“Expect more pockets of forced selling of Bitcoin and Ether as the market figures out who is swimming naked,” Arthur Hayes, co-founder of crypto exchange BitMEX, said on Twitter.

He said he doesn’t know if the selling is over but “for those skilled knife-catchers, there may yet be additional opportunities to buy coin from those who must whack every bid no matter the price.





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