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As the week comes to an end, many cryptocurrency investors grow increasingly nervous. This emotional sentiment has resulted in bitcoin’s new 18 month’s low price, since December 2020. It has also caused a well known crypto company, Celsius, to suspend client’s withdrawals.
Bitcoin started the week at $27,000 USD which was a 10% decrease from Friday’s closing price of around $30,000 USD. Since the opening of the week, it has dropped another 23% to almost $20,000 USD. This is almost a 70% decline from last October’s peak of nearly $69,000 USD.
This sharp decline also mirrored the bearish sentiment across other risk assets. US equities closed 2.9% lower on Friday and continued to decrease as the week proceeded. The 2% decline of the US equity futures would have also been an indicator of how the US equities markets would be performing.
The pressure on risk assets comes after US consumer prices soared 8.6 per cent in May from the same month a year earlier, more than economists anticipated and the highest reading since 1981.
The increasing selling pressure across the cryptocurrencies scene prompted Celsius to put a halt on client’s withdrawals from their cryptocurrency accounts. This is not a good sign for the four-year-old start-up company.
Celsius offers an array of services, including their ‘Swap’ tool. This service allows users to exchange their cryptocurrencies for stablecoins that are linked to fiat currencies, such as the USD.
The company’s reasoning for the halt was to “stabilise liquidity and operations while we take steps to preserve and protect assets”, and that it will look to resume activity as soon as possible.
Celsius’ decision has come at a bad time as weeks earlier, Terra, a popular stable coin linked to the US dollar, had collapsed alongside its sister token Luna. This collapse had wiped out tens of billions of dollars in market value for many investors.
Overall, the cryptocurrency market is on a decline. This is because the biggest coin, bitcoin, is currently trending downwards and this would also translate across all other alt-coins.
Source: GO Markets MT5, Celsius, TradingView, Financial Times, AFR
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