Carnage for short-term traders and speculators as volatility destroys both long and short positions on the way to $20,000.
Bitcoin (BTC) came within $1,000 of its previous cycle all-time highs on June 14 as liquidations mounted across crypto markets.
Bitcoin price hits 18-month lows
Data from TradingView showed BTC/USD hitting $20,816, on Bitstamp, its lowest since the week of December 14, 2020.
A sell-off that began before the weekend intensified after the June 13 Wall Street opening bell, with Bitcoin and altcoins falling in step with United States equities.
The S&P 500 finished the day down 3.9%, while the Nasdaq Composite Index shed 4.7% ahead of key comments from the U.S. Federal Reserve on its anti-inflation policy.
The worst of the rout was reserved for crypto, however, and with that, BTC/USD lost 22.4% from the start of the week to the time of writing.
The pair was also “uncomfortably close” to crossing the $20,000 mark, trading firm QCP Capital noted, this representing the all-time high from its previous halving cycle, something which had never happened before.
In a circular to Telegram channel subscribers, QCP flagged both the inflation topic and potential insolvency at fintech protocol Celsius as driving the sell-off.
“We have been expressing concern about the collapse of a significant credit player since the LUNA blowup. The market is now panicking about the impact and contagion if Celsius becomes insolvent,” it explained:
“Some key liquidation levels that the market is looking out for are 1,150 in ETH, 0.8 in stETH/ETH and 20,000 in BTC. We are getting uncomfortably close.”
Rekt Capital warned that the 200-week simple moving average (SMA) at $22,400 had not been accompanied by significant volume interest, leaving the door open for a test of lower levels.
“BTC has reached the 200-week MA but the volume influx isn’t as strong as in previous Bear Market Bottoms formed at the 200 MA,” he told Twitter followers:
“But downside wicking below the 200 MA occurs & perhaps this wicking needs to occur this time to inspire a strong influx of volume.”
At the time of writing, the 200 SMA appeared to be acting more like resistance than support on low timeframes.