Bitcoin & Ethereum break below key support levels

Bitcoin and Ethereum broke below the US$20,000 and US$1,000 key support levels over the weekend, amidst reeling global macro-economic conditions combined with liquidations and insolvency fears with large crypto lenders and borrowers.

The US Fed raised the cash rate by 75bpts, which was the largest increase since 1994, due to soaring levels of inflation. Crypto markets have generally followed equities in recent movements, as rising interest rates are leading to investor de-risking and a de-valuing of many businesses.

Bitcoin has since recovered to test the near-term resistance level of $US21k, with the RSI also finding support above the 50 level. Bitcoin dominance (total market share of all cryptocurrencies) has fallen to 43.5%, indicating that altcoins aside from Ether have been outperforming the majors last week.?

Data from Glassnode shows that investors have exited BTC positions worth over $7.3bn over the last few days, which has amounted to a period of the biggest USD realised losses in BTC history. Realised loss represents the total loss of all coins where the price of their last movement on-chain was less than their previous movement.?

Three Arrows Capital (3AC), one of the world’s largest crypto funds that manage funds of $18 billion, is facing several margin calls and reportedly has already been liquidated for $400 million. 3AC also had exposure to LUNA during its demise a month ago – that combined with the large amounts of debt and leverage they are exposed to could lead to a collapse of the firm. They have however hired legal and financial advisors recently for proceedings, which could mean a bailout is in the works.

The spotlight is also still on Celsius, as customer withdrawals and swaps are still disabled after more than a week with no timeline for resuming.

Elon Musk is facing a $258 billion lawsuit, that alleges Musk is part of a racketeering scheme to manipulate the price of Dogecoin. Whilst it is true that the price of Dogecoin does pump after any time Musk mentions the asset, Keith Johnson, who filed the lawsuit also aims to represent other investors who were allegedly ‘harmed’.?