Bitcoin struggled to hold above the closely watched $20,000 level, leading to a bout of marked volatility that led to sharp swings over the weekend.
The largest cryptocurrency fell 4.8% on Monday to trade at $19,867 around 2:00 p.m. and surged above 20,000 by 3:45 p.m.
Ether fell 7.8% at times but stayed above $1,000. Altcoins like Solana, Cardano, and Dogecoin declined.
Bitcoin dropped nearly 15% on Saturday, then rallied back above $20,000 on Sunday with a similar-magnitude surge.
The wild pattern of swings suggests that investor sentiment remains fragile as the Federal Reserve and other central banks fight inflation with full force by raising interest rates that drain liquidity from markets.
The T3 Bitcoin Volatility Index, a measure of the token’s expected 30-day volatility, is back to its highs from mid-May when the collapse of stablecoin TeraUSD rocked markets.
Firoz Medora, director of APAC trading at Cameron and Tyler Winklevoss’ Gemini crypto platform, said in a note, “The toxic mix of bad news and high interest rate cycles has plagued the crypto market, and we expect more volatility in the coming weeks. can do.” Monday.
As Bitcoin fell below $20,000 for the first time since late 2020, attention has turned to a cascade of liquidations threatening to spoil the crypto path. Data from Coinglass shows a total of $879 million liquidated over the weekend.
Current trading patterns in Bitcoin and Ether suggest that some large crypto holders are “liquidating at a profit to drive out other players,” said Chiente Hsu, chief executive officer of decentralized finance platform Alex.
Arthur Hayes, co-founder of crypto exchange BitMEX, said on Twitter: “Expect more wallets holding bitcoin and ether forcibly selling bitcoin and ether when the market shows who’s swimming naked.”
He said he doesn’t know if the sale has ended, but “there may be additional opportunities for those skilled knife catchers to buy coins from people who have to hit every bid, no matter the price.”
Troubled crypto lending platform Celsius Network Ltd said Monday it needed more time to stabilize its liquidity and operations after freezing deposits in June.