The crypto market continues to be in turmoil. Bitcoin (BTCUSD) dropped below $20,000 over the weekend, hitting a record low since December 2020 in the $17,800 zone, before attempting to rise above $20,000 on Monday morning.
This new low came after three companies which manage large sums of other people’s funds, Celsius Network, Babel Finance, and Three Arrows Capital, announced the suspension of customer withdrawals.¹ Celsius Network, which nurtures individual investors with crypto lending. manages $12 billion in assets.
Babel Finance, a crypto lending service provider with about 500 customers and which only raised $80 million in funding in the past month, gave notice of suspension of customer withdrawal indefinitely. Finally, hedge fund Three Arrows Capital (3AC), which focuses on crypto startups and has $10 billion in assets under management (March figures) is experiencing huge losses after investing $200 million in Luna and turning to zero last month.
However, such turbulence is not exclusive to the crypto market. The central banks’ attempts to fight inflation by raising interest rates is leading to concerns that the implementation of such policies could slow down the currently sluggish economic recovery, also known as stagflation.
From a technical point of view, the bitcoin sell-off from the breakout of the original $28,000 low zone last week appears to be ongoing, with no trend reversal seen so far. However, the current $19,800 price zone, the same all-time high seen in 2017, may be the last hope before the price returns to the $10,000 level again for an uptrend view. It remains to be seen whether the price can significantly return to above $20,000.
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