Bitcoin falls under $20k mark

10 Mar 2023

The Bitcoin price fell under the $20,000 mark for the first time since the middle of January as a slew of bearish news has impacted crypto's robust uptick so far this year.

Bitcoin did make up for some of the losses late on Thursday, and at the time of writing, the price of the world's largest cryptocurrency by market cap stood at $20,040, a 7.7% decline over the last 24 hours.

After hitting an all-time high of over $69,000 in November 2021, Bitcoin subsequently fell later that year and in 2022 and started this year around the $16,000 level. A strong rally heading into the middle of last month saw Bitcoin up more than 50% for the year at $25,000, CoinDesk reports.

However, the market has been impacted since then by a stronger-than-forecast US inflation report, questioning the Federal Reserve's claim that a disinflation trend was underway. Earlier this week, Fed Chair Jerome Powell told Congress there's more work to do to revert inflation back to the 2% target.

As well as the interest rate woes, the collapse of crypto-friendly Silvergate Bank also weighed on the market. 

"Silvergate is one of several factors in Bitcoin's underside test," said Joe DiPasquale, CEO of crypto fund manager BitBull Capital. "In addition to Silvergate, there is market concern of greater interest rate hikes by the FOMC and softening stock market prices. The SEC also shows increasing scrutiny of crypto. Taken together, the market has continued to tighten and retest support levels."

He added: "As we have stated since January, we believe it will test its support under $20K before moving up again. We see $18k as the next major level of support."

However, many experienced cryptocurrency investors will sensibly look through these headwinds.

This was echoed by deVere CEO and founder Nigel Green: "Instead, rightly, they will be focused more on the fundamentals of cryptocurrencies, such as Bitcoin.

"Like many major corporations, financial institutions, governments, sovereign wealth funds, prestigious universities, and household-name investing legends, amongst others, they'll remain confident that digital currencies are the inevitable future of money.

"In our increasingly tech-driven, globalised world, it makes sense to hold digital, borderless, decentralised currencies," he added.