The cryptocurrency market has been in a freefall since the start of the week. Bitcoin, the largest cryptocurrency in terms of market cap, which acts as the barometer for the rest of the crypto market, has been inching downwards since over the last few months, though it seemed to have found support around the $30,000 mark over the last couple of weeks.
However, it broke past that level on Monday amidst news of the leading decentralized finance (DeFi) platform, Celsius Network, announcing a curb on all withdrawals, and transfers, citing “extreme market conditions.”
Combined with the prevailing financial conditions around the world, including reports of US inflation being at a record 40-year high, Bitcoin took a tumble down for the worst. In the days since it breached the $30,000 level, the crypto has fallen over 30% and is now at the cusp of breaching the $20,000 mark.
It isn’t looking good for other cryptos as well, with virtually all the leading cryptos registering double-digital falls over this past week. Ethereum, the second-largest crypto in terms of market cap, is languishing at around $1055, after dropping over 40% from highs of over $1,700 just last week.
The selling pressure in the crypto exchanges is very apparent for everyone to see. However, some investors such as Rekt Capital predict the markets to reach “seller exhaustion.”
These are levels where a majority of the participants take the same position and leave only a few investors to take the other position. For instance, the sellers will soon run out of buyers. Exhaustion usually signals the reversal of the current trend.
Others however don’t think the fall will be arrested anytime soon. Arthur Hayes, co-founder of the BitMEX crypto exchange tweeted that things could get real ugly if Bitcoin breaches the $20,000 mark, or if Ethereum goes under $1000.
“As far as the charts go, you better get out your Lord Satoshi prayer book, and hope the lord shows kindness on the soul of the #crypto markets [because] if these levels break, you might as well shut down your computer [because] your charts will be useless for a while,” wrote Hayes.
The Crypto Fear & Greed Index is perched firmly in the “Extreme Fear” territory. It is currently at 7, and there’s no indication that the next update will cause the number to move northwards.