Bitcoin and Ethereum Value Significantly Drops, Before Bouncing Back

Bitcoin and Ethereum Value Significantly Drops, Before Bouncing Back

20.06.2022 08:07
by Gabriel Cross
2 min read

Bitcoin and Ethereum’s prices have plummeted during the weekend, only for them to partially recover on Sunday. BTC reached a low of $17,772 on Saturday, but is now priced at $19,976, according to CoinMarketCap. ETH sank to $898, only to rise to $1,073.

The declining prices are part of an ongoing downward trajectory in cryptocurrencies’ value. BTC fell below $26,000, for the first time in a year, seven days ago. This led many Bitcoin users to sell off their assets. And Ethereum’s low $898 figure represents a drop of over 46% in just one week.

According to expert crypto analysts, such low prices could start a wave of forced liquidations. This happens when users with large investments are forced to close positions on BTC and ETC derivative products. As the prices are too low, they cannot generate adequate collateral. In turn, forced liquidations would shrink the prices even lower, leading to more liquidations, and triggering the so-called “cascade effect”.

However, thanks to the Bitcoin and Ethereum’s marginal recovery, the beginning of the wave of forced liquidations has been temporarily halted. But, if the prices begin to drop again, BTC could eventually sink to as low as $13,800, in the current market conditions.

Author

  • Gabriel Cross used to be a bank officer for an international bank for many years. From this point of view, he says the time spent obtaining a degree in economics was a waste of time. A few years back, he decided to quit his job and start trading. He is obsessed with decentralized finance, but he often plays with the stock market, investing with great pleasure into ground-breaking tech solution startups.

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