Bitcoin Is Still at Late 2020 Levels
Bitcoin gained on Thursday, following a similar rise in US markets, but investors are still reeling from the world’s largest cryptocurrency’s stunning loss over the last few days, which saw it almost fall below $20,000.
BTC was trading at roughly $21,667.90, up nearly 3% on the previous day.
On the other hand, Bitcoin is still trading at levels not seen since December 2020. The digital currency has lost roughly 27% in the previous week and nearly 70% since its all-time high in November. Other cryptocurrencies, like ether, have also risen in value in the last 24 hours.
Bitcoin linked to stock indices, particularly the Nasdaq, climbed on Wednesday after the Federal Reserve of the United States raised interest rates by 0.75 percentage points. That is one of the reasons bitcoin rose marginally on Thursday.
After the collapse of the so-called algorithmic stablecoin TerraUSD and its companion token luna, sentiment is still shaky.
Some, like tether and USD Coin, are backed by real assets like fiat currency and government bonds. However, several algorithmic stablecoins, such as TerraUSD, lack reserve assets. Instead, an algorithm governs the $1 peg.
The present bear market, termed a new “crypto winter,” is also putting other projects to the test.
USDD, another algorithmic stablecoin, lost its dollar peg earlier this week. Tron DAO Reserve, which is in charge of keeping the USDD peg at $1, also holds other cryptocurrencies in reserve, including the stablecoins tether and USDC. Meanwhile, all eyes are on Celsius, the crypto lending platform that may be insolvent, raising concerns about market contagion. Celsius halted consumer withdrawals earlier this week. With the current market behavior, which combines significant risk-off positions and demand for US dollars with the cryptocurrency market’s inherent challenges, it is difficult to continue issuing Ethereum price predictions. The Terra crash triggered a perfect storm, putting the highly leveraged crypto market in serious trouble.
