May 22, 2024

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Bitcoin drops 8%, falling below $62K before rebounding

Bitcoin drops 8%, falling below $62K before rebounding

Bitcoin (btc) The broader cryptocurrency market fell nearly 10% on Saturday, with the price of the largest digital asset briefly falling below $62,000 before recovering to around $64,000 as of press time.

He wasn't alone: ​​other major digital assets saw similar declines over the past 24 hours, including Ethereum. (ether)which fell 7% to just under $3,000, BNB (National Bank of Bahrain) (down 9%) and Solana (Sol) (down 12%), according to CoinGecko. Trading volume has increased over the same time period.

The decentralized finance (DeFi) sector has been hit particularly hard by market chaos, with falling prices leading to liquidations and increasing the potential for chaos for some protocols.

Among the closely watched protocols is Ethena, the buzzy Ethereum project behind USDe, an “artificial dollar” designed to mirror the price of the US dollar. Ethena has attracted over $2 billion in deposits, but uses a controversial method to maintain a “peg” of the US dollar to one dollar that has not been tested under these adverse market conditions.

The direct cause of Saturday's market declines was not clear, although former BitMEX CEO Arthur Hayes wrote in a blog last week that dollar liquidity would decline just before US tax payments are due on April 15 – next Monday. He added that decreased liquidity will lead to lower prices.

Cryptocurrency market prices began to recover after the X (formerly Twitter) account linked to the Iranian Permanent Mission to the United Nations said that “the matter can be considered over,” though it warned of a “more serious” attack if the Israeli regime launches one. Another mistake.”

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