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Bitcoin (BTC), the cryptocurrency industry’s premier digital asset has slipped below its major support level and is currently trading below $20,000.
At the time of writing, Bitcoin is changing hands at $19,213.64, down 3.96% in the past 24 hours. With the latest slip in its price, the digital currency has now deviated from its All-Time High (ATH) price of $68,789.63 by as much as 72.04%.
The battery Bitcoin is experiencing is a culmination of several factors, chief of which is the global economic outlook which may soon push many nations into recession. The rate of inflation has continued to grow, a move that has stirred a stiff monetary tightening from many Central Banks from the United States to France and beyond.
Bitcoin is now considered an investible asset, and like stocks, the investor sentiment around it is generally down at the moment. All of the factors bordering on continuous price plunge are visible at the moment, and investors are likely to steer clear of what they consider a risky investment in the face of uncertainty.
Industry-Wide Liquidity Pressure Impacting Bitcoin Price
There is ongoing liquidity pressure in the industry in which some of the most widely acclaimed companies are going bankrupt. While the origin of these operational catastrophes was not triggered by Bitcoin, the aftermath is notably being felt by the premier cryptocurrency.
Earlier this week, a British Virgin Island court ordered the liquidation of Three Arrows Capital (3AC) as the company is adjudged to be completely insolvent. Teneo Restructuring was tapped to handle the liquidation process, and it marks the second major blockchain startup that has gone under this year.
The first was Terraform Labs whose algorithmic stablecoin, UST depegged from the USD it was pegged 1:1 with. Along with its sister token LUNA which crashed over 99.9% in about a week and cost a lot of investors billions of dollars in losses. While Terraform Labs is attempting to revive the protocol with a new token, exposed hedge funds like Three Arrows Capital have not recovered from the losses incurred.
Celsius Network is another name whose faith hangs in the balance. With the crypto lender’s operations halted when it stopped withdrawals a few weeks ago, lawyers have advised the firm to declare Chapter 11 bankruptcy.
More and more companies have continued to experience these wide-ranging operational challenges, a trend that typically places pressure on Bitcoin as the flagship representative of the nascent ecosystem.
With no end in sight any time soon, the ongoing battery in the price of Bitcoin is currently reflected in altcoins, and even publicly traded firms like Coinbase Global Inc (NASDAQ: COIN) whose primary interests are vested in digital currencies.
While many are taking a conservative approach to the ecosystem of how volatile it currently is, MicroStrategy Incorporated (NASDAQ: MSTR) has maintained a bullish stand, stacking up an additional 480 BTC units worth $10 million as reported earlier by Coinspeaker.