2022-6-15 01:01 |
On Monday, Bitcoin shed over 17%, dropping to levels last seen in December 2020 and extending losses that have gripped the cryptocurrency for the last seven or so months. On the other hand, Ethereum lost over 15.36% plummeting as low as $1,212. By the day’s close, the entire cryptocurrency market had shed over $1B based on Coinglass data with smaller altcoins bearing the biggest brunt.
The ongoing sell-off has sent a wave of mixed reactions with various pundits trying to figure out the next bottom for the two assets in a bid to avoid trying to catch the falling Knife.
According to Arthur Hayes, co-founder and former CEO of BitMEX crypto exchange, the worst may be coming. On Tuesday, he warned that there was still a lot of open interest (OI) in the $20k and $1k areas for BTC and ETH respectively in the OTC market. OTC market data is not tracked by on-chain metrics and indicators which makes it dangerous for BTC and ETH to go closer to those strike prices as more assets could be sold.
“If these levels break, $20k BTC and $1k ETH, we can expect massive sell pressure in the spot market as dealers hedge themselves. We can also expect that there will be some otc dealers and that will be unable to hedge properly and might go belly up.” Wrote Hayes.
Hayes also believes that once prices drop below the said levels, it might take longer to get a recovery.“If these levels break, you might as well shut down your computer because your charts will be useless for a while.” He added.
Elsewhere, veteran trader Peter Brandt believes that a further crypto market meltdown is in the offing. On Monday, the pundit referred to the crypto plunge as a “porcelain sell-off,” suggesting that Bitcoin, Ethereum, and other cryptocurrencies would continue tumbling.
To him, a trend reversal may not be forthcoming “until enough people who swore they would never sell, no matter how low it goes, finally declare they have had enough and sell out just to stop the pain.” For that reason, as well as the lack of strong support for the top two cryptocurrencies, he sees Bitcoin bottoming out at $13,000 while Ethereum could drop as low as $667.
As of writing, Bitcoin is trading at $21,570 after a 31% drop in the past 7 days and a 67.87% drop from its all-time high. On the other hand, Ethereum has plunged by 6.57% on the day and currently trading at $1,169. Since tapping an all-time high of $4,891 in November 2021, ETH is currently down 75.98%.
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