Over the weekend, bitcoin dropped below a key psychological level for buyer support, and so far has not been able to get back above it.
The bitcoin (BTC-USD) price fell below $20,000 on Saturday and is trading at $19,379 on Sunday morning, a loss of 29.36% over the past week. It briefly slipped below $18,000 on Saturday afternoon, but the price so far has rallied 1.18% over the past 24 hours.
Ether (ETH-USD), which is more intertwined with crypto’s DeFi segment that has lately wrecked havoc on the risk management strategies of significant industry players, is trading at $1,039 per coin, a loss of almost 29% in the last week. On Saturday, its price dipped below $900 before bouncing back.
Crypto’s total market capitalization has dropped by almost $300 billion since last Friday’s hot inflation data, from $1.19 trillion to $853 billion as of Sunday morning, according to Coinmarketcap.
The sector is suffering from a liquidity crisis that is pressuring a number of crypto hedge funds and lenders. Coinbase (COIN) and others have announced layoffs, while other firms have been forced to liquidate positions or freeze customer accounts.
On Friday, Babel Finance temporarily suspended redemptions and withdrawals, citing “unusual liquidity pressures,” according to a customer note. That followed crypto lender Celsius Network’s move to freeze all customer accounts earlier in the week.
BlockFi, Genesis Trading, and FTX also stated they’ve liquidated certain overleveraged counterparties on their platforms with some speculation and evidence pointing to Three Arrows Capital.
“Crypto is going through a classic deleveraging cycle and it has to continue that cycle until it hits bottom,” Matt Hougan, chief investment officer of Bitwise told Yahoo Finance Live on Friday.
Other crypto movers
Over the past 24 hours, here’s how other major cryptocurrencies were moving: Binance’s BNB token (BNB-USD) up 2.28%, Solana (SOL-USD), up 5.25%, Cardano’s ADA token (ADA-USD), down 0.29%, Chainlink (LINK-USD), up 7.89%, Polkadot’s DOT token (DOT-USD), up 5.35%, Avalanche’s AVAX token (AVAX-USD), down 0.72%, Tron (TRX-USD), up 3.46%, Polygon’s MATIC token (MATIC-USD), down 3.10%.
