A brutal day of losses unfolds as Bitcoin crosses under its previous cycle high for the first time in history.
Bitcoin (BTC) achieved a bear market first on June 18 as BTC price action gave up $20,000 support.
BTC price crosses under 2017 all-time high
As nerves heightened after the United States Federal Reserve’s comments on the inflation outlook, crypto markets bore the brunt of a sell-off, which began after shock Consumer Price Index (CPI) figures last week.
Losing the psychologically significant $20,000 mark, Bitcoin also achieved a lifetime first — dropping below its previous halving cycle’s high for the first time in its history.
There's a first time for everything https://t.co/1qLdb67aHR
— cevo (@cryptocevo) June 18, 2022
Reacting, commentators attributed the latest weakness to liquidity problems at investment fund Three Arrows Capital (commonly known as 3AC) in addition to existing troubles tied to FinTech protocol Celsius and the overall macro environment.
Luna, Celcius, 3AC = Contagion
Those will lead to more blowups that we are yet to hear of
Things likely get worse before they better. Until you start hearing about how all of these are intertwined and cause other funds to unwind becoming forced sellers https://t.co/oju42hSCNw
— Pentoshi Powell Jr (@Pentosh1) June 15, 2022
Three Arrows co-founder Zhu Su said that the firm was “in the process of communicating with relevant parties and fully committed to working this out,” without confirming specific problems.
The abrupt dip below $20,000 came during weekend trading where thin order book liquidity amplified volatility.
A bear year unlike any other?
BTC/USD thus sealed 37% losses for the first two weeks of the month, making June 2022 the worst month of June on record, according to data from on-chain monitoring resource Coinglass.
Year-to-date, the pair traded down almost 60% at the time of writing, over 70% below last November’s all-time highs of $69,000.
As Cointelegraph reported, historical trends suggest that 80-84.5% is the classic drawdown target for bear markets, this putting BTC/USD at between $11,000 and $14,000.
“BTC still needs more volume & volatility than at present to match volume levels at previous Bear Market Bottoms at the 200 MA,” popular trader and analyst Rekt Capital tweeted, continuing analysis of Bitcoin’s 200-week moving average, a key lifelong support line.
“Promising sign is that seller volume is above-average for the 1st time this week but much more is needed for final capitulation.”
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