30 Aug 2022 Simon Briggs
Bitcoin Fell Below $20,000, The Overall Crypto Market Is Now Less Than $1 Trillion
Bitcoin, the world’s largest crypto to date, seems to be losing ground as the crypto leader fell down past $20,000 to trade at a current price point of $19,978.35 per BTC, after rebounding from its monthly low of $19,600.79.
The sharp decline also took down the rest of the sector, wiping out $50 billion of the entire market capitalization in just 24 hours, throwing it back below $1 trillion.
The reasons for the drop
Many crypto experts believe that the drop is connected with the wider market movements after FED Chair Jerome Powell’s statement past Friday that the Federal Reserve would continue on its interest rate hikes in order to combat inflation and rumors of recession setting in.
“Money is flowing out of risky assets. Crypto followed the sharp adjustment of the U.S. stock market. Markets didn’t like what he had to say and Bitcoin is resuming as a high-beta asset.” Cici Lu, chief executive officer at consulting firm Venn Link Partners, noted in regards to Powell’s statement.
Despite the ongoing bullish sentiment, Bitcoin’s revisit below the crucial psychological support zone of $20,000 may induce further trouble not only for the crypto leader, but also for the entire sector, especially at times when interest rate hikes throw even stock markets out of balance.
Future price movements?
Katie Stockton of Fairlead Strategies predicted that the long-term support zone for Bitcoin now sits in the $18,300 to $19,500 area. Stockton’s predictions were echoed by Fundstrat strategist Mark Newton, who flagged some key areas in the $19,000 range, while seeing a “real area of importance” around $17,500, near the June lows.
Furthermore, derivatives markets also took a beating, with $288 million of crypto long positions liquidated on August 27, while $562 million of longs were liquidated on August 19, indicating a loss of trust in the recovery of cryptos.
Ethereum also made a dive, losing as much as 4.1% on Monday to $1,422.67, continuing a decline from around $2,000 a couple weeks ago.
“Ethereum’s drop ahead of the impending Merge is also of note as bearish sentiment appears to be taking hold across all so-called risk assets. The volatility that has become so characteristic of the digital token space shows no signs of abating.” analysts at Bitfinex noted.
“Rich dad, poor dad” Robert Kiyosaki sees another market crash
One of the biggest names in mainstream finance, Robert Kiyosaki alarmed his Twitter followers that the 2008 market crash will be smaller than the current one.
“All markets crashing: real estate, stocks, gold, silver, bitcoin. Middle class wiped out by higher oil inflation. 2008 was [a] great time to get rich. Everything went on sale. [In] 2013 I published the “Rich Dad’s Prophecy” predicting [a] BIGGER crash coming. THAT CRASH IS HERE. Million will be wiped out,” Kiyosaki wrote on Twitter.
Interestingly, Kiyosaki seems to have switched his stance on treasury bonds, and now suggests people would invest in precious metals and Bitcoin.
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