Bitcoin falls below the key $ 20,000 limit

For the first time since November 2020, the price of Bitcoin has broken below the key threshold of $ 20,000, which risks triggering a new wave of sales that will deepen the crisis in the digital real estate sector.

The largest cryptocurrency, which serves as a benchmark for the broader cryptocurrency market, fell below $ 18,000 on Saturday, falling about 14 percent before retreating slightly. This brought down the previous bull run in crypto markets in 2017 and wiped out the multi-year gains of long-term holders.

Traditional financial markets tumbled this week as the three major central banks, led by the US Federal Reserve, increased borrowing costs as part of an effort to reduce inflation. Global stocks released their worst week since the gloomy days of March 2020 as traders lamented that aggressive action could slow global growth or trigger a recession.

At the height of the epidemic the crypto market maintained particularly severe pressure as betting on returns triggered by massive stimulus efforts by central banks and governments suddenly turned upside down.

Investors and executives have been watching the price of bitcoin with interest in recent days, as a fall below $ 20,000 could cause markets to forcibly dissolve major foreign challenges, push up prices and exacerbate the credit crunch that has already plagued large crypto lenders. And traders.

Last week Celsius and Babel Financial, a pair of crypto lenders, Withdrawal prevented Three Arrows was unable to raise additional funds to offset the sord races as it failed to meet requests from creditors. Last month, two popular tokens fell among crypto traders seeking higher yields – Luna and Terra.

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“Dominoes are falling now,” said Connor Ryder, an analyst at Kaiko, a research and data provider on Friday. “With more dominoes, more downward price action may come, which will probably see the snowball with these dissolutions.”

Bitcoin has depreciated by more than 70 percent since last fall as investors left more speculative assets as central banks tightened monetary policy around the world. Total crypto market value fell below $ 1tn from a high of $ 3.2tn. The price of ether has also fallen below $ 1,000, leading to more than 70 percent of its decline this year. According to data from CryptoCompare, the price of Bitcoin fell to about $ 17,600 at one point on Saturday, moving below $ 20,000 again.

Small lenders have also reduced or suspended withdrawals, while Toronto-listed crypto platform Voyager on Friday signed a deal to borrow more than $ 200 million from trading firm Alameda.

“Today’s actions give Voyager more flexibility to mitigate current market conditions,” said CEO Stephen Earlich.

“Credit facilities will only be used by Voyager if it is required to protect customers’ assets,” he added.

Ryder expects further fall in the markets to put more pressure on other lenders and traders.

“If we get down another leg, it will very soon become clear who is hanging on for the love life,” he said.

Additional report by Adam Samson in Milan

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