After a weekend of relentless losses, the two major crypto coins made marginal recoveries on Sunday, topping $20,000 and $1,000 respectively.
BTC has recovered just over 15% in the past 24 hours, rebounding from a shocking low of $17,772 yesterday, at $20,482 at the time of writing, according to data from CoinMarketCap. ETH, which fell to $898 yesterday, recovered more than 25% in the last day to hit $1,130 at the time of writing.
The price swings mark at least a temporary respite from the sharp downward trajectories of the past week. Last Sunday, BTC fell below $26,000 for the first time in a year, a negative milestone that triggered a sell-off. Yesterday BTC fell below $20,000, then $19,000, then $18,000, all in one day. ETH has been declining fairly steadily alongside BTC, dropping to $898 yesterday afternoon, a striking fall of over 46% in just one week.
By falling below $20,000 and $1,000 yesterday, BTC and ETH created market conditions that experts said could trigger a wave of forced liquidations. In such a scenario, large-scale investors in both cryptocurrencies would be forced to close positions in BTC and ETH derivatives, with prices too low to generate sufficient collateral. Such events would likely drive BTC and ETH prices even lower, triggering more liquidations, in what is known as a “cascade effect.”
But by recovering, even slightly, to levels above $20,000 and $1,000 today, BTC and ETH have temporarily halted a snowball selloff that some analysts said. could send BTC as low as $13,800 in the current bear market.
The severity and duration of the crypto bear market remain unclear. The latest crypto crash began early last month, when major coins fell with the stock market. Since then, the crypto market has struggled to recover, with each new ripple effect from the crash causing further damage. The latest repercussions came last week when crypto lenders Celsius and babel froze withdrawals for all customers, citing potential liquidity issues. Major crypto investment firm Three Arrows Capital may also be at risk of insolvency.
Want to be a crypto expert? Get the best of Decrypt straight to your inbox.
Get the biggest crypto news + weekly digests and more!