Reporter: Zheng Yuhang Editor: Tan YuhanOn June 18th, in the trading session, Bitcoin continued to decline after breaking the key support level of $20000 per coin, marking the first time since November 2020. As of press release, the lowest drop for the day was $18811
Reporter: Zheng Yuhang Editor: Tan Yuhan
On June 18th, in the trading session, Bitcoin continued to decline after breaking the key support level of $20000 per coin, marking the first time since November 2020. As of press release, the lowest drop for the day was $18811.4, with a drop of over 10%. This has been Bitcoin's 12 consecutive days of decline.
According to CoinGecko's data, Bitcoin has fallen by over 70% since reaching its peak of $69000 in November last year. The recent downward trend of Bitcoin has been referred to by The New York Times as a 'free fall'.
In addition, the second largest cryptocurrency, Ethereum, also plummeted by 10% to $997.75, the lowest level since January 2021.
The Daily Economic News reporter noticed that the total market value of the entire cryptocurrency market in November was $3 trillion, and the current total market value is about $900 billion. That is to say, in just 7 months, the cryptocurrency market has "evaporated" $2.1 trillion, close to the market value of an apple (AAPL, stock price of $131.56, market value of $2.13 trillion).
Former CEO of BitMEX, Arthur Hayes, previously stated that $20000 and $1000 respectively represent price support levels for Bitcoin and Ethereum, and if breached, it would trigger "significant selling pressure". In addition, Sam Callahan, a Bitcoin analyst at the Bitcoin Exchange Swan, also believes that based on previous bear market experience, Bitcoin may fall by more than 80% from its historical high. This means Bitcoin will drop to $13800.
According to CNBC, the Federal Reserve raised interest rates by 75 basis points on Wednesday (the largest increase since 1994), leading investors to withdraw from various risky assets, including cryptocurrencies. The aggressive rate hikes by the Federal Reserve and the worsening liquidity squeeze have put these investors in financial difficulties.
Among them, Three Arrows Capital is in its own liquidity crisis. According to reports, this $10 billion crypto hedge fund is on the brink of bankruptcy, and Three Arrow Capital is an investor in Terra, placing leveraged bets on numerous tokens including Bitcoin, Ethereum, and Solana. The company's co founder, Zu Shu, told the Wall Street Journal that Sanjian Capital is considering selling assets and being acquired by another company to avoid bankruptcy.
The Daily Economic News reporter noticed that the Terra coin that Sanjian Capital is betting on is a stable currency, originally worth $1. However, due to factors such as the sharp drop in US stocks, soaring inflation in the US, and layoffs in the technology industry since the spring of this year, investors have begun to lose confidence in cryptocurrencies and transfer funds to lower risk assets. As of now, the value of Terra coin is infinitely close to 0 ($0.000054). This week, an experimental encryption bank, Celsius, stopped customers from withdrawing Terra coins, which once again raised concerns about the potential collapse of the encryption market.
If Bitcoin drops below $20000, it's better to turn off the computer because the charts are no longer useful, "Hayes told Decrypt, a media company focused on digital assets.
Daily Economic News
Daily Economic News
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