Bitcoin falls below $20,000, Ethereum tests $1,000

Bitcoin has fallen to a significant new low in the current bear market.

On Saturday morning, Bitcoin fell below $20,000, according to data from CoinMarketCap – a milestone seen as a key support level for the top cryptocurrency by market cap. At press time, Bitcoin is trading around $19,460, down over 6% on the day.

Although BTC’s break of $20,000 is a largely symbolic barrier, experts believe that a drop below this level could trigger a wave of “forced liquidations,” in which major crypto investors will be forced to close positions in BTC derivatives products, because they now have insufficient collateral. Such events would likely only drive the price of Bitcoin further lower and trigger more liquidations.

At the time of publication, Ethereum remains above the $1,000 support level, albeit marginally; it is currently trading at around $1,020.

The total market cap of all cryptocurrencies is currently around $853 billion, down over 5% in the last 24 hours.

According to former BitMEX CEO Arthur Hayes, $20,000 and $1,000 represent price levels for BTC and ETH, respectively, that would trigger “massive selling pressure” if breached.

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If these levels break, $20,000 $BTC & $1,000 $ETH, massive selling pressure is to be expected on the spot markets as traders hedge. We can also expect that there will be some OTC traders who will not be able to hedge properly and may buckle.

— Arthur Hayes (@CryptoHayes) June 14, 2022

Crypto markets plummeted early last month as major coins fell in correlation with the stock market. Within a week, both Terra’s stablecoin UST and native token LUNA imploded, wiping out roughly $40 billion in value.

Since then, cryptocurrencies have been on a steady downtrend with tech stocks, a downturn accelerated by investors withdrawing millions of dollars from decentralized finance amid fears of a worsening bear market.

On Sunday, crypto lender Celsius paused all customer withdrawals, citing concerns that the company would not have sufficient funds to cover a run on the platform resulting from the depegging of cryptocurrency stETH from ETH.

As the cascading effects of each new crypto market downturn continue to play out, it remains unclear when BTC, ETH, and the broader crypto market will hit the proverbial bottom.