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Bitcoin and Ethereum price: The low is followed by a slight recovery

The prices of Bitcoin, Ether and Co. had an extremely volatile weekend. The heavy losses on Saturday were followed by a rebound on Sunday. So the cryptocurrency market isn’t calming down yet.

The price of a bitcoin, the oldest and largest digital currency in terms of market value, initially fell well below the $ 20,000 mark on Saturday. Market number two, Ether, has dropped below the $ 1000 mark. The market value of all approximately 19,900 cryptocurrencies continued to decline.

Bitcoin’s value dropped to $ 17,605 on the Bitfinex trading platform on Saturday evening. It was almost 14 percent less than the day before. On Sunday, the price initially climbed above the $ 19,000 (18,100 euros) mark over the course of the day.

During the night from Sunday to Monday, the BTC rate even rose again above the 20,000 mark. Meanwhile, the value has risen to 20,580 US dollars (19,560 euros). The price of an ether initially dipped further on Sunday to $ 881. However, it also recovered significantly overnight on Monday and climbed back to over 1,100 US dollars.

A bitcoin cost as little as at the end of 2020, the price of ether was last as low as at the beginning of 2021. Bitcoin has lost about 56% of its value in the past twelve months, while the ether has lost about 69%. According to Coinmarketcap, the market volume of all currently existing cryptocurrencies dropped to $ 861 billion. That’s less than a third of the nearly $ 3 trillion record set in November.

The annual development of many digital currencies is devastating. Since the beginning of the year, bitcoin has lost nearly 60 percent of its value, and the ether has also lost more than 70 percent in value. The decline has accelerated, especially in recent weeks, as Bitcoin & Co was sucked into the downward spiral of a generally bad mood on the financial markets. Despite recent massive losses, Bitcoin’s value has increased significantly over the past decade.

The reasons for the steep price losses in recent months are, on the one hand, of an economic nature: around the world, many central banks are raising key interest rates to keep high inflation in check. Capital market interest rates are therefore rising at a historically high rate. Risky assets, which include cryptocurrencies, will be hurt by development because they don’t generate current revenue. Conversely, fixed income securities, for example, are becoming more profitable again.

In this already unfavorable context, the growing problems of the sector weigh particularly heavily. The sentiment has weighed on sentiment for some time that cryptocurrency lender Celsius Network has suspended payments and transfers. There are also reports that some hedge funds that rely on crypto assets are increasingly suffering from falling prices. A few weeks ago, a collapse in the prices of an internet currency, the so-called TerraUSD stablecoin, which was actually designed to be stable, caused a stir.

Cryptocurrency expert Timo Emden of Emden-Research also provided technical reasons for the renewed price drop. “The relatively low trading volume over the weekend may have triggered the downturn,” says one comment. “If more is placed on the market, this can trigger a domino effect and trigger further sales. Rapid explosive price movements are therefore possible.”

Bitcoin and other digital currencies have traditionally been subject to severe fluctuations. There have already been several so-called “crypto winters” in recent years, such as 2014 and 2018, where prices plummeted before things then rose again. This time around, however, the economic environment is even more difficult than it was then.


(tkn)

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