Bitcoin breaks beyond the $20,000 barrier, snapping a 12-day losing streak

On Sunday, Bitcoin broke a 12-day losing streak, fighting its way back above $20,000 and dominating the cryptocurrency market in a quick reversal following a record-breaking run of losses.

The world’s largest cryptocurrency rose 16 percent on Sunday, recouping losses from a dramatic plunge on Saturday that drove the token as low as $17,599, according to CoinMarketCap. Ether, which had fallen as low as $881 during the selloff, has risen 26% to $1,140, while alternative coins such as Avalanche and Solana have also seen gains. As of 8 a.m. in Singapore on Monday, bitcoin was trading at around $20,500, mainly holding on to Sunday’s gains.

“I think we started to hit levels near the bottom where institutional investors see a buying opportunity,” said Paul Veradittakit, a partner at crypto-focused hedge fund Pantera Capital.

The crypto market is infamous for its violent swings, especially on weekends when movements are amplified, and the last two days’ whipsaw delivered the latest example. Analysts warn that Sunday’s respite could be fleeting: The overall tone is still negative, with monetary tightening creating macro headwinds and crypto crises fueling fears of escalating turmoil. Despite the rebound on Sunday, Bitcoin is still down more than 30% this month and 70% from its all-time high in November.

According to CoinGecko, Bitcoin volume reached $40 billion in the 24 hours leading up to midday Sunday New York time, which was more than usual. Volumes were $25.6 billion and $22.5 billion on Saturday and Sunday, respectively.

On Saturday, Bitcoin fell below $19,511, the peak it reached during its last bull run in late 2017. Bitcoin had never fallen below previous cycle high in its nearly 12-year trading existence.

According to Katie Stockton, managing partner and founder of Fairlead Strategies, the coin also broke past a technical support threshold of $18,300. She noted that weekly losses below that level would raise the likelihood of a drop below the next support level of $13,900.

A short-term, “counter-trend” technical signal, according to Stockton, “provides some hope that a rebound will materialise in the near future.” However, she warned against buying the decline since “momentum is highly negative.” Other Crypto Twitter users pointed to $20,000 as a major pivot point that might give support if retaken and held in the coming days; if not, it could act as a market ceiling.

According to Mati Greenspan, inventor of Quantum Economics, the $20,000 level is “important” since it reflects the 2017 high and has “served as both support and resistance on several occasions since then.” “It will be quite positive if we can get above that level and hold it.”

A toxic mix of bad news cycles and rising interest rates has harmed cryptocurrency in recent days, culminating in a 12-day losing streak for Bitcoin. On June 15, the Federal Reserve hiked its key interest rate by three-quarters of a percentage point, the largest increase since 1994, and central bankers indicated that they will continue to hike aggressively this year in the fight against inflation.

Three Arrows Capital, a crypto hedge fund, reported substantial losses and indicated it was considering asset sales or a bailout, while Babel Finance, another lender, followed Celsius’s lead on Friday.

According to pricing data from CoinGecko, the widely used stablecoin’s circulation has dropped by more over $15 billion since the May collapse of the Terra ecosystem, the first serious crisis to hit the market this year. The redemptions totaled $4.4 billion in the last seven days.

The crypto market as a whole is now a sliver of what it was in late 2021, when Bitcoin was trading near $69,000 and traders poured money into all kinds of speculative trades. According to CoinGecko data, the global market cap of cryptocurrencies was around $900 billion on Sunday, down from $3 trillion in November.