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Bitcoin (BTC) Crashes As Celsius Fallout, Liquidity Crisis Weigh

Bitcoin, Ethereum And other major coins plummeted on Monday night. The market capitalization of the world’s cryptocurrencies has fallen below the psychologically significant $ 1 trillion to $ 944.9 billion. This fell by nearly 12.5% ​​during the day.

Price performance of major coins
coin 24hours 7 days price
Bitcoin BTC / USD -15.7% -28.3% $ 22,460.32
Ethereum ETH / USD -16.4% -35.1% $ 1,204.60
Dogecoin Doge / USD -15.65% -34.5% $ 0.05

Top 24-hour winners (data via CoinMarketCap)
Cryptocurrency 24-hour rate of change (+/-) price
phantom (FTM) + 6.25% $ 0.24
Theta Network (Theta) + 5.4% $ 1.15
Decentraland (Mana) + 4.3% $ 0.825

Related item: How to get a free NFT

Important reason: Risk assets plunged on Monday, cryptocurrencies followed stocks and continued to be under pressure after the latest US inflation data.

S & P500 Bear territory On Monday, it was down 20% from the record high of 4,818 in January. Nasdaq closed at 10,809.23, down 4.7% on Monday. Futures on each index were 0.24% and 0.4% higher at the time of pressing.

Investors are worried about the Federal Open Market Committee over the next two days. meeting It will start on Tuesday.

I have expectations in the United States Federal Reserve We will be more aggressive with rate hikes than expected. Goldman Sachs We expect to raise rates by 75 basis points in June and July. Barclays When Jeffreys We forecast an increase of 75 basis points in June. report Reuters.

Data from CME Group The market shows that it expects a 90.9% chance that a rate hike will occur in a region of 75 basis points.

On the cryptocurrency side, declining liquidity due to tightening has hurt investors’ sentiment, but digital assets have suffered double pain.

OANDA Senior Market Analyst Edward Moya “The sentiment towards cryptocurrencies is terrible as the global cryptocurrency market capitalization has fallen below $ 1 trillion. Bitcoin is trying to form a base, but it can become even uglier when price action falls below the $ 20,000 level. There is sex. “

Global Block Analyst Marcus Sotirio Touched Fear of bankruptcy Surrounding one of the largest cryptocurrency lending platforms, CelsiusIn a memo on Monday.

“They were badly exposed [TerraClassicUSD (USTC)] When the DeFi protocol Badger DAO was abused, it had about $ 500 million in client funding and lost about $ 50 million. “

“The biggest problem Celsius currently has seems to be his $ 1.5 billion position in stETH. 1stETH is a claim against 1ETH locked in the beacon chain. Currently, stETH is more than 5% against ETH. Because it is trading at a discount on the market, there is concern that when a client attempts to redeem a position, Celsius may run out of liquid funds to repay them, “Sotiriou wrote. increase.

StETH is an ERC20 token that represents Ether bet on Lido.

Sotiriou said Celsius is making “large loans” to illiquid positions to pay for redemptions by customers, but may run out of funds within five weeks. rice field.

Bitcoin and cryptocurrency investors Lark Davis I tweeted that “massive liquidation” will be seen on decentralized financial platforms.

“This is hundreds of millions [Ethereum] When [Bitcoin] The market was sold to a weak market and prices fell. “

Lead Insight Analyst Clemente He tweeted that he didn’t catch the absolute bottom and said it was a “great time” to make large allocations over a wide period of time.

“I wanted to buy these levels of ratings for two years, but now that I’m here, I’m not going to adjust my goals low,” Clemente said on Twitter.

Delphi Digital In a blog on Monday, he said higher rates and tighter financial conditions were not “historically kind” to Bitcoin.

Kevin Kelly“Bitcoin and the broader crypto market are not separated from macro risks, especially those related to global liquidity and financial conditions,” said an analyst at Delphi Digital.

Bitcoin-Dollar Performance in Tight Financial Conditions — Provided by: Delphi Digital

“History suggests that it is not the rate hike that is as detrimental to BTC as the tightening of liquidity conditions and increased market volatility associated with strong risk-off sentiment,” Kelly wrote.

Read next: This is what Bitcoin crash means for Tesla

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