Bitcoin, the world’s most dominant cryptocurrency, plunged from around $29,000 a coin amid rising global uncertainty surrounding interest rates.
The catalyst for this disruption was the emergence of discussions surrounding prolonged higher interest rates, which ignited a sell-off of risk assets such as Bitcoin.
The consequence was a flurry of mass liquidations of bullish positions, sending shockwaves throughout the digital currency space.
Bitcoin, which had been hovering near the $29,000 mark, experienced a drastic plunge to as low as $25,314 within a mere 24-hour interval. Even though rebounded modestly during early European trading on Friday, the toll of this tumultuous episode was evident with over $1 billion worth of positions unwound during the selloff as reported by Coinglass data.
Despite the setback, Bitcoin remains notably resilient, maintaining a position 60% higher than its year-start value.
A pivotal focus for crypto traders now centers on the critical $25,000 level for Bitcoin. Should this level be breached, the positioning of options suggests the potential for a cascading effect of liquidations, further amplifying the impact.
Market analyst Josh Gilbert from the trading and investment firm eToro emphasized the significance, stating, “With limited catalysts to push Bitcoin higher in the short term, a fall below $25,000 could put bears in charge, and if the rout in global risk assets continues, Bitcoin could face further downside.”
Sentiment also felt the weight of a Wall Street Journal report indicating that Elon Musk’s SpaceX had divested its Bitcoin holdings following a $373 million write-down. The timing of SpaceX’s Bitcoin sale, however, remained unclear according to the Journal report.
