Bitcoin, the largest cryptocurrency, fell more than 9 percent below $21,000 and hit a new low in July. Bitcoin also experienced its largest one-day drop in value since June.
Bitcoin crashed with U.S. stock options falling after selling emerged in European trading the day following.
According to CoinMarketCap data at the time of writing, benchmark cryptocurrency was trading for $21,217.
Coinglass data shows that approximately $220,000,000 worth of crypto positions was liquidated within one hour. About half of this amount was attributed to bitcoin.
Within the past 24 hour, close to 170,000 positions were closed and the total liquidation amount was $600 millions.
Analysts believe that the close correlation between U.S. stocks prompted the sell-off. cryptocurrencies In recent months, there have been disagreements within Federal Reserve about the pace of interest-rate hikes.
Germany’s producer price index (PPI) for industrial goods rose to record 37.2% in July – compared to 32% expected. This report prompted central banks to increase interest rates to reduce inflation and triggered selling pressure on cryptocurrency.
James Bullard, President of St. Louis Federal Reserve Bank, supported a 3-yard rate rise at the Fed’s September meeting. Esther George, president and CEO of Kansas Federal Reserve Bank said there are good reasons to continue raising rates.
Craig Erlam is a senior analyst at Oanda. Although the cause of the bitcoin sell-off is not clear, the move seems well-founded, given that the cryptocurrency has barely recovered to gain lost ground. According to Erlam, the next support level is at $20,000 and that “the crypto winter has not ended yet.”
The Bitcoin “Fear and Greed Index”, currently at 29.
Il Capo, a cryptocurrency analyst, said that “BTC Levels: The main resistances are 22500 and 23500. A short squeeze at these levels can be a great selling opportunity. Main support: $19k. This is the definitive bearish confirmation of new lows. Main target: $16k as always. For the next few weeks, very likely.,” He wrote Follow him on Twitter.
Bitcoin’s price has rebounded since hitting a low of $17,599 on June 18, but it is still down 54 percent this year.