Bitcoin (BTC-USD) heads towards the potential breakdown below the $20,000 level as the crypto asset sits currently at $20,600, down 6.9% in early market trading.
BTC-USD has now closed lower in eight straight sessions and is on pace for a ninth. Over that period Bitcoin erased 34.6% of its gains. Moreover, Bitcoin trades lower by 56.6% in 2022 and off 70.2% from its record high of $68,999 dating back to mid-Nov. of 2021.
Arthur Hayes, BitMEX co-founder tweeted: “If these levels break, $20K $BTC & $1K ETH, we can expect massive sell pressure in the spot markets as dealers hedge themselves. We can also expect that there will be some otc dealers and that will be unable to hedge properly and might go belly up.”
Marcus Sotiriou, Analyst at GlobalBlock stated in a note that leading the crypto market lower are systemic issues in crypto infrastructure companies such as Celsius. At the same time, insolvency of crypto hedge funds and an unwind of liquidity in global markets due to rate hikes and QT are also factors that are contributing to the extreme selloff.
Bitcoin is not the only cryptocurrency that has slipped either, Ethereum (ETH-USD) trades lower on Wednesday by -9.2% and is down -71.5% YTD. Litecoin (LTC-USD) trades in the red early on by -2.2% and LTC-USD has fallen -71% YTD.
Securities and Exchange Commission Chairman Gary Gensler, who famously said cryptocurrency is “rife with fraud, scams, and abuse,” is reiterating his warnings about crypto lending platforms offering exceptionally high returns to investors.