If bitcoin drops below this level, the cryptocurrency could be game over. And from that point it’s only $800.
The world’s leading cryptocurrency is approaching dangerous levels after five straight days of drastic price declines.
In the last 24 hours, Bitcoin hit a low of $20,834 but was trading slightly higher at $21,442 at the time of writing.
However, one expert has warned that a dip in BTC below the all-important $20,000 mark could spell disaster for the blockchain.
Likewise, the future of the world’s second largest cryptocurrency, Ethereum, is in doubt.
It traded at its bottom of $1,075.28 over the last day.
One expert has warned that if Bitcoin falls below $20,000 and Ethereum below $1,000, there will be “massive selling pressure” that will drive prices further lower.
Arthur Hayes, former BitMEX boss, took to Twitter to voice his concerns.
“If these levels, $20,000 BTC and $1,000 ETH, break, we can expect massive selling pressure in the spot markets as traders hedge,” Hayes wrote.
“We can also expect that there will be some OTC traders who will not be able to hedge properly and may go rogue.
He continued in his Twitter thread: “As for the charts, you better get out your Lord Satoshi prayer book and hope the lord is kind to the soul of the crypto markets.
“Bc [because] If those levels break, you might as well shut down your computer bc [because] Your charts will be useless for a while.”
The bitcoin and ether tokens have suffered, as has the rest of the world’s cryptocurrency in the wake of economic turmoil and the disruption of transactions by major crypto exchanges.
Around noon Monday, UK-based Celsius pays interest on cryptocurrency deposits, lends them, and also sells its own token, CEL, but it halted all activity around noon Tuesday.
In a blog post, the company warned against “pausing” all withdrawals and inter-account transfers, adding: “Due to extreme market conditions, we are announcing today that Celsius is pausing all withdrawals, swaps and inter-account transfers.
“We are taking this action today to better enable Celsius to meet its take-back obligations over time.”
They currently still have all of their customers’ accounts frozen.
In response, the cryptocurrency’s total market cap fell drastically below $1 trillion. At the time of writing, it was $924 billion.
The cryptocurrency has faced a reckoning over the past few weeks — and particularly the past few days — as fears of a global recession mount amid rampant inflation and the US Federal Reserve’s rate hike.
On Friday, data noted that US inflation had hit a new high – rising to 8.6 percent in May, the worst reading since 1981.
Over the weekend, the cryptocurrency crashed in response to the news.
The US Federal Reserve is expected to hike interest rates this Wednesday to combat rising inflation.
Economists are predicting the interest rate will be hiked to 0.25 percent or 1.50 percent for July, with the central bank doing something similar last month.
The cryptocurrency is closely related to the traditional stock market, and in the past few days, markets like the Dow Jones have plummeted and entered a bear run.