The crypto currency Bitcoin continued its price slide over the weekend and at times fell well below the important $ 20,000 mark. The oldest and best-known cyber currency was only $17,649 at times on Saturday.
Bitcoin was about 14 percent lower than on Friday, the lowest it has been in 18 months. In November, a bitcoin was almost four times as expensive at around $68,000, and the value has fallen by more than 60 percent since the beginning of the year.
The cryptocurrency Ethereum lost 73 percent in the period. On Sunday, the price recovered to around $19,500, but did not make up for Saturday’s losses.
“The breach of $20,000 shows that confidence in the crypto industry has collapsed,” market analyst Edward Moya of The Americas OANDA said on Saturday. “There are too many cryptocurrencies and crypto exchanges that are under tremendous financial pressure given the cost of borrowing,” he said, referring to rising interest rates.
Many small investors who had invested their money in cryptocurrencies would now be permanently scared off. The slide in prices is accompanied by significant losses on the global stock markets due to fears of a recession.
Jochen Stanzl, chief market analyst at CMC Markets, referred to a general sell-off in the risk markets just a few days ago. If Bitcoin does not rise back to just under $33,000 at the end of the month, there is a risk of another crash to the 10,000 mark from a technical point of view.
Industry analyst Timo Emden said on Sunday that the situation was still fragile from a fundamental and technical point of view. There can be no talk of a serious recovery. “A capitulation of investors and with it all swansongs on Bitcoin
With the market oversold, a strong countermove is in the air. The effects of the ongoing price declines should now finally have reached the Bitcoin manufacturers (miners). For many, the calculation no longer adds up, which intensifies concerns about a final capitulation by the majority.
If prices fall even lower, the trend should strengthen. “Only a few farms could survive.” The industry suffers from high energy costs. The miners could try to cover their expenses by selling the Bitcoin holdings.
In the cybercurrency market, investors had recently been concerned about the difficulties of Celsius Networks, a provider of cryptocurrency loans. Celsius had said it was suspending withdrawals and inter-account transfers to stabilize liquidity and operations.
The company lends digital money, provides cryptocurrency-backed loans, and offers savings products to customers who invest their cybercurrencies with the company. On its website, the company advertises annual returns of up to 17 percent.
The market feared that other companies in the industry would be sucked into the abyss. One problem is that companies like Celsius operate in a gray area, said Matthew Nyman of the law firm CMS. Unlike classic banks, they are not subject to any clear regulation with corresponding disclosure requirements.