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Bitcoin (BTC) rebounds but struggles to keep above $ 20,000

Bitcoin continues to trade around $ 20,000 and investors are always aware of where the price will go next.

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Bitcoin soared 8% on Monday after plunging on the weekend, but continues to hunt down investors and tinker around $ 20,000.

According to CoinDesk data, the world’s largest cryptocurrency was trading at 3:20 am ET for $ 19,935.98. In the last 24 hours, Bitcoin has significantly exceeded $ 20,000 and has fallen to $ 18,261.75.

Over the weekend, Bitcoin fell to $ 17,601.58.

Meanwhile, according to CoinDesk data, ether surged more than 12% and traded above $ 1,075 at 3:13 am ET.

Investors welcome the rebound, but Bitcoin is about 70% below its record high in November last year, down 57% to date.

“Dead cat bounce”

Industry watchers said the rally could be short-lived, as Bitcoin can’t be convincingly held above $ 20,000.

Vijay Ayyar, vice president of corporate development and international affairs for cryptocurrency exchange Luno, told CNBC that “this is likely a dead cat bounce” unless Bitcoin’s price exceeds $ 23,000 per day. rice field.

“It was oversold, so we expected a bounce,” he said.

The broader crypto market has been plagued by many problems in recent weeks, starting with the collapse of the token Luna associated with the algorithm stablecoin terraUSD.

Currently, crypto lending companies that promise high yields to users to deposit digital coins are attracting attention. Last week, Celsius, which manages 1.7 million customers and nearly $ 12 billion in crypto assets, suspended the withdrawal of customers’ funds, raising concerns about bankruptcy.

Cryptocurrency companies have announced rounds of layoffs in the midst of market downturn. Cryptocurrency wallet and exchange Coinbase announced last week that it would cut 18% of its full-time jobs. A lending company called BlockFi announced last week that it would dismiss one-fifth of its staff.

Macroeconomic factors such as high inflation and future rate hikes from the US Federal Reserve are also affecting the market.

The bottom of the market?

Given the sharp drop in cryptocurrency prices over the past few weeks, some observers said the market could be near the bottom.

Giles Keating, director of Bitcoin Suisse, told CNBC’s Squawk Box Europe on Monday that “we are approaching a point where some of the actual excess leverage could be kicked out of the system and bottomed out.”

Leverage is a transaction in which an investor effectively uses the borrowed money to make a transaction. This means that investors can increase their exposure to positions with less initial capital. However, this is considered a risky trading instrument as investors need to secure sufficient capital to meet the so-called margin requirements. Otherwise, their positions will be closed automatically. These liquidations are seen as a major factor behind market movements.

Keating said there was still a risk of further liquidation, but he believes most of the sales are over.

“Some people have warned that we aren’t there yet, and that if we fall sharply, we’ll see another wave of liquidation,” Keating said.

“There is always a risk, but given the very large double-digit rebounds we’ve seen with Bitcoin, especially Ether, many of these very large clearings are now complete and the base is actually formed. And confirm that it has.”

https://www.cnbc.com/2022/06/20/bitcoin-btc-rebounds-but-struggles-to-hold-above-20000-.html Bitcoin (BTC) rebounds but struggles to keep above $ 20,000

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