After seven-day losses of 34% and 36%, the two leading coins by market capitalisation made marginal recoveries on Sunday (June 19th), up to over $20K and $1K, respectively.
According to CoinMarketCap, Bitcoin (BTC) has bounced back by more than 15% in the last 24 hours, from a staggering low of $17,772 to $20,482. Ethereum (ETH), which declined to $898 yesterday, has recovered more than 25% in the last day to $1,130.
Bitcoin price in USD. Image: Trading View
The price fluctuations indicate a reprieve from stark downward trends during the past week. Last Sunday, BTC plummeted well below $26K for the first time in a year, a bear market with a massive selloff. Previously, BTC dropped to below $20K, then $19K, and then $18K within a single day. ETH fell consistently alongside BTC, down to $898 by yesterday afternoon, a remarkable decline of more than 46% within a week.
Ethereum price in USD. Image: Trading View
According to experts, BTC and ETH’s tumbling below $20K and $1K yesterday created market conditions for a wave of forced liquidations. In such a circumstance, large-scale investors would have to close positions on BTC and ETH derivative products as the prices were too low to yield enough collateral. Such events could exacerbate BTC and ETH price drop, leading to more liquidations in a so-called “cascade effect.”
But with their marginal recoveries to over $20K and $1K today, the two coins have temporarily stopped a snowballing selloff that would send BTC as low as $13,800 in the existing bear market.
It’s unclear as to the crypto bear market’s severity and duration. The recent crypto crash occurred last month when top coins dropped along with the stock market. Since then, the cryptocurrency market has struggled to bounce back, with the crash’s new ripple effect giving rise to further damage. The latest consequences were witnessed last week as crypto lenders Babel and Celsius froze withdrawals for their customers due to potential liquidity issues. Major crypto investment companies such as Three Arrows Capital may be on the verge of insolvency.
