(Kitco News) The crypto space faced another strong selloff over the weekend as Bitcoin dipped below $18,000 and Ethereum dipped below $900.
The overall crypto market capitalization fell to $847 billion, down nearly 10% on the day. Bitcoin touched $17,677, the lowest level since November 2020, and Ethereum fell to a low of $893, the level last seen in January 2021.
“Bitcoin appears to be hanging on for life as cryptocurrencies remain in crash mode. The worst week since the early days of the COVID pandemic has caused widespread crashes across Bitcoin, Ethereum and Dogecoin,” said Edward Moya, Senior Market Analyst at OANDA.
At the time of writing, Bitcoin was at $18,633, down 74% from its all-time high of $69,000 in November, and Ethereum was at $948, down 81% from its November all-time high. November all-time high of $4,878.
The initial trigger for the massive crypto plunge in June was the macro environment. First, a startling inflation figure from May caught markets off guard, followed by a 75 basis point hike by the Federal Reserve on Wednesday – the biggest rate increase since 1994.
The dramatic crypto upheaval has also gained momentum following contagion risks within the crypto community itself after a lending company Celsius said it was halting all transactions on its platform. To learn more about this, click here.
After failing to hold several key support levels, analysts are now watching a price zone below the $14,000 mark.
“Bitcoin is down sharply today after accelerating lower following the collapse of its consolidation phase. It is currently down around 14%, bringing its month-to-date loss to around 44%. %,” said Katie, Founder and Managing Partner of Fairlead Strategies. Stockholm. “The breakdown is unconfirmed (didn’t spend enough time below to make it conclusive), but it shows the inherent risk in risky assets right now. If we see back-to-back weekly closes below from $18.3,000 the risk would increase to the next support below $13.9,000.”
Stockton added: “We do not recommend countertrend positions, however, noting that the momentum is strongly negative.”
In the first two weeks of June, investors continued to position themselves defensively, and the crypto’s upside potential remains limited until stagflation fears ease, said global strategist Alkesh Shah. of crypto and digital assets from Bank of America.
“While painful, shedding scum from the industry is likely healthy as investors focus on projects with clear roadmaps for cash flow and profitability versus purely revenue growth. he digital asset ecosystem is an emerging high-growth speculative asset class with tokens that are exposed to similar risks as tech stocks. The upside is likely capped until the risks associated with rising rates , inflation and recession are fully discounted,” Shah said.
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