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The price of Bitcoin briefly hit $21K in the Asian trading session as the global market plunge continues without any signs of easing.
The price of Bitcoin (BTC) dropped below $21K during the Asian trading session on Tuesday as the broader crypto sell-off rages. BTC retraced by a massive 10% within the last 24 hours but has now recovered slightly. As of press time, the king coin is now within a hair’s reach of $23K. In the same period, the price of Ethereum (ETH) also plunged more than 6%, according to Coinbase data.
Crypto assets were also further beaten down on Monday after trading platforms like Celsius and Binance ceased withdrawals. Celsius chalked up its suspension of swaps, transfers, and withdrawals to “extreme market conditions”. Furthermore, the network also explained that the move was to “stabilize liquidity and operations”. In a published memo, Celsius acknowledged the inconveniences caused by this decision, but stated that it was for the greater good.
“We understand that this news is difficult, but we believe that our decision to pause withdrawals, Swap, and transfers between accounts is the most responsible action we can take to protect our community.”
Stocks of crypto-linked businesses such as MicroStrategy (NASDAQ: MSTR) and Marathon Digital (NASDAQ: MARA) also took a pounding. For instance, the value of MicroStrategy’s BTC holdings now sits $1 billion lower at $3 billion. Although the business intelligence firm previously dismissed margin call threats, it would undoubtedly have to post additional collateral for a loan.
Speaking on the current pervasive investor sell-off in the crypto marketplace and the entire financial tapestry in general, ZebPay’s Nirmal Ranga explained:
“Everything is on fire right now, be it the equities, be it the crypto assets or anything. What you’re seeing in the market is … fear, uncertainty and doubt. Technically, markets look oversold and there has to be some floor that we’re going to hit in Bitcoin in the coming future.”
Inflationary Factors & Interest Rate Hikes
Bitcoin price faces even more uncertainty as the US Federal Reserve raises interest rates to combat rising inflation. The king coin more than halved its Tuesday intraday slide of $2,386 to trade at $22,690 at noon in Tokyo.
The current crypto market capitalization is below $1 trillion for the first time since February last year. Furthermore, the total value wiped off the market in the last few days is approximately $200 billion.
Bitcoin Risks Making a Sustained Run Below $21K Price Level
As Bitcoin continues its tailspin, some strategists patiently waiting for the perfect time to buy. According to Fundstrat Global Advisors’ Mark Newton, BTC is “getting closer to intermediate-term levels of support which suggest buying dips should be correct by the end of the second quarter.”
However, the sustained and unrelenting pressure of the sell-off suggests that ‘buying the dip now’ may be risky. This is because there is no telling how low Bitcoin would go before adequate liquidity returns to the crypto market.
If investors remain jittery about liquidity, then Bitcoin price may slip well below the previously approached $21K level.