Some of the greatest price movements in bitcoin’s history occurred over the weekend, according to analysis of historical price data. The price of the most popular cryptocurrency is still down 69% from its peak in November 2021.Investors have sold speculative assets like cryptocurrency as the Federal Reserve hikes interest rates.After a turbulent holiday weekend that saw the lowest values in more than a year, bitcoin and other cryptocurrencies recovered on Tuesday.
According to statistics from CoinDesk, bitcoin increased 4.6 percent to $21,435.25 after hitting a low of $17,601.58 on Saturday afternoon, its lowest level since November 2020. From its peak high in November 2021, bitcoin has fallen by 69 percent as of Tuesday. Friday’s closing price was $20,627.21. According to CoinDesk, ether increased 4.7 percent to $1,168.42 after reaching a low of $880.93 on Saturday, its lowest level since January 2021. Using statistics from CoinMarketCap, the market value of all digital assets was $939 billion on Tuesday, down from around $3 trillion in November of previous year. Investors have been selling speculative assets like cryptocurrencies as the Federal Reserve keeps raising interest rates to control higher-than-expected inflation. Numerous job losses have been reported by major cryptocurrency trading firms including Coinbase Global Inc., BlockFi, and Crypto.com in response.
Kevin Kang, chief investment officer of cryptocurrency hedge fund BKCoin Capital, stated that “we are at the mercy of the macro environment and crypto is definitely not immune to it. I think we are going to continue to see the downtrend market for the foreseeable future until the Fed” stops raising interest rates and ultimately begins easing them” he added.
In the “crypto winter,” many cryptocurrency businesses are under pressure. Due to “severe market conditions,” one of the biggest crypto lending companies, Celsius Network LLC, hasn’t allowed consumers to withdraw money. Due to exceptional liquidity concerns, Asia-based cryptocurrency lender Babel Finance informed clients on Friday that it was halting all redemptions and withdrawals from all products. The firm announced on Monday that it had struck preliminary agreements with counterparties and significant clients over the length of time that some loans would need to be repaid, but it hasn’t yet permitted cash withdrawals to resume.
According to the owners of the cryptocurrency-focused hedge fund Three Arrows Capital Ltd., the company employed legal and financial advisors after incurring significant losses due to a general market selloff in digital assets. A second significant cryptocurrency lender, BlockFi, said on Tuesday that it has obtained a $250 million revolving credit line from the cryptocurrency exchange FTX to strengthen its balance sheet.
While prices have rebounded from their weekend lows, Armando Aguilar, a venture investor at LightShift Capital, noted that big enterprises in the sector are still having problems. “More downward pain could still be on the horizon,” he added.