With fears of an inflationary wave sinking portfolios, investors are not only dumping bonds and trimming their equity positions but are also offloading crypto-assets. The current sentiment of pessimism is influencing a dramatic selloff.
Crucial levels for Bitcoin and Ethereum
As the carnage continues, Arthur Hayes watched as Bitcoin formed a base at $20,000 while Ethereum tried to cap its losses at $1,000. A drop below those levels, however, could be uglier for both, the Hayes warned in a recent Twitter post. Publish.
The former BitMEX chief explained that a breach from the said levels is likely to trigger a massive sell pressure in the spot markets as dealers hedge themselves. However, there might also be scenarios where many OTC dealers fail to hedge themselves and cover their positions, ultimately sparking more sell-side pressure on both Bitcoin and Ethereum.
“When it comes to charts, you better pull out your Lord Satoshi prayer book and hope the lord shows kindness to the soul of the crypto markets. Because if those levels break, you might as well shut down your computer because your graphics will be useless for a while.
No Respite
The rumors about potential Celsius insolvency placed a tremendous bearish strain on prices already weak from Friday’s CPI print already weighing on the market. Crypto-asset trading firm, QCP Capital, noted similar liquidation levels that market participants need to look out for.
“We are expressing our concern over the collapse of a major credit player since the LUNA explosion. The market is now panicking about the impact and contagion if Celsius becomes insolvent. Some key liquidation levels that the Market research is 1,150 in ETH, 0.8 in stETH/ETH, and 20,000 in BTC We are getting uncomfortably close.
Popular analyst “Rekt Capital” speculated that Bitcoin might be “performing Macro Double Bottoms at the 200-week moving average” while observing that, historically, bear market capitulation has witnessed a firm level of support at Bitcoin’s 200-week moving average. If this scenario plays out, Rekt Capital said that BTC is very close to forming its first “Macro Bottom” at the 200-week MA at around $23,000.
If that were to break, Bitcoin could turn into bigger losses. If so, on-chain data analyst pseudonym “whalemap” said that the cryptocurrency could reach its “ultimate maximum pain bottom” at $13,331.
