After a weekend of relentless losses, the first two cryptocurrency coins made minor recoveries on Sunday, exceeding $ 20,000 and $ 1,000, respectively.
BTC has recovered just over 15% in the last 24 hours, recovering from a shocking low of $ 17,772 yesterday to $ 20,482 at the time of writing, according to CoinMarketCap. ETH, which fell to $ 898 yesterday, recovered more than 25% on the last day to $ 1130 at the time of writing.
Fluctuations in prices mark at least a temporary delay from the sharp downward trajectories in the last week. Last Sunday, BTC fell below $ 26,000 for the first time in a year, a negative milestone that sparked a massive sell-off. Yesterday BTC fell below $ 20,000, then $ 19,000, then $ 18,000, all in one day. ETH fell relatively consistently with BTC, falling to $ 898 by yesterday afternoon, a staggering drop of over 46% in just one week.
Falling below $ 20,000 and $ 1,000 yesterday, BTC and ETH created market conditions that experts say could trigger a wave of forced liquidations. In such a scenario, large investors in both cryptocurrencies will be forced to close positions in derivatives of BTC and ETH, and prices are too low to generate sufficient collateral. Such events are likely to reduce the prices of BTC and ETH even more, triggering more liquidations, which is known as the “cascade effect”.
But recovering, even slightly, to levels above $ 20,000 and $ 1,000 today, BTC and ETH have temporarily halted the snowball, which some analysts say could send BTC up to $ 13,800 in the current bear market.
The weight and duration of the cryptocurrency market remain unclear. The latest crypto crash began early last month, when major coins fell along with the stock market. Since then, the crypto market has struggled to recover, with each new pulsating effect of the crash causing further damage. The latest consequences came last week, when crypto creditors Celsius and Babel froze withdrawals for all customers, citing potential liquidity problems. The large crypto investment company Three Arrows Capital may also be at risk of bankruptcy.
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