Bitcoin Bounces Back Above $20,000 And Ethereum Exceeds $1,000
The top two coins by market cap, Bitcoin and Ethereum have now bounced back after suffering seven-day losses of 34% and 36% respectively.
By Anna B Kiwanuka
After a weekend of relentless losses, crypto’s top two coins made marginal recoveries, rising above $20,000 and $1,000, respectively.
According to data from CoinMarketCap, Bitcoin (BTC) has increased by just over 15% over the past day, climbing from a stunning low of $17,772 yesterday to $20,482 at the time of writing. Ethereum (ETH), which yesterday fell to $898, has increased by more than 25% in the past day to $1,130 as of the time of writing.
The price movements signal at least a short-term break from the sharp downward trends of the previous week. The first time in a year that Bitcoin dipped below $26,000 was last Sunday, a negative development that sparked a significant selloff. BTC dropped below $20,000, $19,000, and $18,000 all in one day yesterday. ETH and BTC both had pretty continuous declines, and by yesterday afternoon, ETH had dropped to $898, a startling reduction of more than 46% in just one week.
BTC and ETH created market conditions that, according to experts, might lead to a wave of forced liquidations by falling below $20,000 and $1,000.
In such a scenario, large-scale investors in both cryptocurrencies would be forced to close positions on BTC and ETH derivative products, with prices too low to generate sufficient collateral. Such events likely would push the prices of BTC and ETH down even further, triggering more liquidations, in what’s known as a “cascade effect.”
But by recovering, even marginally, to levels above $20,000 and $1,000 today, BTC and ETH have temporarily halted a snowballing selloff that some analysts have said could send BTC as low as $13,800 in the current bear market.
Uncertainty still surrounds the extent and length of the crypto bear market. Early last month, when the stock market and several major coins plummeted together, the most recent crypto crash started. Each fresh fallout from the crash has made it harder for the cryptocurrency industry to recover causing more damage to the crypto industry.
The latest repercussions came last week when crypto lenders Celsius and Babel froze withdrawals for all customers, citing potential liquidity issues. Major crypto investment firm Three Arrows Capital may also be at risk of insolvency.