- Bitcoin price falls below $21,000, down over 3% in 24 hours amid broader crypto market sell-off
- Over $200 million in crypto positions liquidated in past day as BTC tests levels last seen in November 2020
- Drop takes bitcoin’s decline from its November 2021 peak to over 70% as markets price in recession fears
Bitcoin (BTC) fell below $21,000 on Monday amid a broader sell-off in crypto markets that saw more than $200 million of leveraged positions liquidated in the past 24 hours.
The largest cryptocurrency by market capitalization was trading around $20,700 at press time and is down over 3% over the past 24 hours, according to CoinDesk data.
BTC is testing levels last seen in November 2020, when prices were on the way up toward the bull market high around $69,000 reached in November 2021. The price drop on Monday has taken bitcoin’s decline from that peak to over 70%.
Altcoin Price Action
Other major cryptocurrencies also fell on Monday, with ether down over 6% in the past 24 hours. Popular meme token dogecoin slipped over 5% in the same period.
The overall crypto market capitalization dropped below $900 million, down over 3% over the past 24 hours, according to CoinMarketCap data.
Forced Liquidations
Over $200 million of cryptocurrency positions have been liquidated in the past 24 hours across major exchanges, according to data from Coinglass. That includes around $63 million of bitcoin futures contracts liquidated.
Forced liquidations occur when an exchange forcefully closes out leveraged positions as prices fall below margin requirements. Monday’s liquidations indicate heavy leverage use by traders who bet on rising crypto prices.
Market Context
The latest crypto sell-off comes amid concerns of a possible recession and rising interest rates worldwide, which have taken down both stocks and cryptocurrencies this year.
Bitcoin has closely tracked the stock market in 2022 and has been highly correlated with the tech-heavy Nasdaq 100. Some analysts think bitcoin could see a deeper decline if equities extend their drop.
The Federal Reserve’s interest rate hike last week also signaled more are on the way as the central bank tries to tame high inflation. Some economists warn sharply higher interest rates could trigger a recession.
The Outlook
With major tokens falling below key support levels, technical analysts are watching for potential downside extension. The next major support level for bitcoin sits around $17,600, near the December 2020 highs.
Longer-term holders appear to be keeping their positions. Only about 12% of bitcoin’s supply last moved between one month and one year ago, according to data from Glassnode. But more turbulence could be ahead in the short run.
