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Investing.com – Le attempts to recover key $20k resistance lost during a dark weekend for the crypto universe. The most capitalized digital currency lost 9% on Saturday, registering a fall of 35% on a weekly basis, while the currency gained 13% after losing 20% year-on-year.
Last week we wrote how the current period can be considered for all intents and purposes a “new crypto winter” comparable to 2017/2018, due to endogenous and exogenous causes in the world of virtual currencies. Also Read: We’re in the Midst of Another Crypto Winter – WisdomTree
In terms of market capitalization, the crypto galaxy has gone from a peak of over $3 trillion to under $1 trillion in a matter of months. In comparison, between December 2017 and June 2018, the sector fell from $850 million to $250 million, a drop of more than 70%.
Apart from the bearish market environment affecting all risky assets, the collapse of the stablecoin TerraUSD and the difficulties faced by major platforms such as Coinbase Global Inc (NASDAQ:) and Celsius have increased skepticism towards the cryptocurrency world after two years in which Bitcoin skyrocketed to $69k (Nov 2021).
“Nowhere is this more turbulent than in the crypto space, which endured emotional volatility over the weekend,” Oanda analyst Jeffrey Halley wrote in a note. “Bitcoin fell 15% on Saturday as it crashed through the $20,000 support, ending the day at $18,955.00.”
According to the analyst, Saturday’s move is “very similar to margin calls triggered by the break of the $20,000.00 support. Sunday’s price action also suggests this. I’m not ruling out a crypto rally -currencies this week as the cryptocurrency world has gone oversold and many may switch to buying,” he added.
Quoted by CNBC, Vijay Ayyar, vice president of corporate and international development at cryptocurrency exchange Luno, said that “unless the price of bitcoin closes above $23,000 on a daily basis , it’s likely to be a dead cat bounce.”
“An analysis of the latest developments reveals a dissonance,” writes Benjamin Dean, director of digital assets at WisdomTree instead. “On the one hand, the macroeconomic outlook could not be more pessimistic. On the other hand, there have never before been digital asset projects receiving funding of this magnitude. The road could get longer 12 to 18 months Those who manage to find business models that can generate revenue – and attract users – will create the next wave of opportunity in the digital asset space.However, there will be many casualties along the way, as it has already been in this decade of digital asset evolution.”