Lowest weekly close since December 2020 — 5 things to know in Bitcoin this week


Lowest weekly close since December 2020 — 5 things to know in Bitcoin this week

Bitcoin sheds 12% in 24 hours as a fresh altcoin meltdown combines with macro pressures to offer nothing but misery for hodlers.

Lowest weekly close since December 2020 — 5 things to know in Bitcoin this week

Bitcoin (BTC) begins a new week with a totally different feel to last as BTC/USD seals its lowest weekly close since December 2020.

A night of losses into June 13 means that the largest cryptocurrency is now edging closer to beating its ten-month lows from May.

The weakness has left few guessing: shock inflation data from the United States last week sparked a chain reaction across risk assets and low weekend liquidity appeared to exacerbate the consequences for crypto assets.

The macro pain continues this week. The Federal Reserve is due to provide information on rate hikes and the economy more broadly — the first official policy update since the inflation figures.

The mood among analysts on both Bitcoin and altcoins — while not unanimously bearish — is thus one of resignation. A period of painful trading and hodling conditions may have to be endured before a return to the upside, something which at least chimes with the historical patterns of Bitcoin’s halving cycles.

What could be the market triggers in the coming week? Cointelegraph takes a look at five factors to consider as a Bitcoin trader.

Celsius “collapse” looms, sending Bitcoin tumbling

It was a long time coming, but Bitcoin has finally broken out of the tight range in which it has traded since first dipping to ten-month lows last month.

After bouncing from $23,800, BTC/USD then circled the $30,000 zone for weeks on end, failing to deliver a decisive move up or down. Now, while not what investors would like, the direction seems clear.

It is not just one range that Bitcoin has exited, as trader and analyst Rekt Capital noted on June 12. In abandoning the zone near $30,000, BTC/USD is also ditching a macro trading range in place since the start of 2021.

As such, the most recent weekly close, at around $26,600, was Bitcoin’s lowest since December 2020, data from Cointelegraph Markets Pro and TradingView shows.

“Worst is over. $BTC 25k defended. Think can squeeze a little now, resume selling tomorrow with equities,” economist, trader and entrepreneur Alex Krueger predicted.

An accompanying chart showed a band of buy support in place at $25,000, helping peg 24-hour losses at 12%.

BTC/USD order book data chart (Binance). Source: Alex Krueger/ Twitter

The market at the time of writing was nonetheless in a state of flux as the dust settled on a grim reminder of what happened during May’s spike below $24,000.

Whereas then it was Blockchain protocol Terra’s (LUNA) and TerraUSD (UST) tokens imploding, this weekend, it was the turn of fintech platform Celsius and its CEL token to follow suit.

Down 40% on the day in USD terms, CEL predictably suffered from a decision by Celsius to halt withdrawals and transfers altogether in order to “stabilize liquidity.”

“Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts. We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations,” a blog post issued on June 13 reads.

Reacting, Bitcoin pundits already skeptical of the altcoin space following the Terra debacle wasted no time in pinning the blame for the extent of BTC price losses on events at Celsius.

“Celsius looks like it could collapse and take a bunch of customer money with it,” Robert Breedlove, host of the What is Money podcast, added in part of Twitter comments.

Fed policy update looms on 40-year record inflation

A black swan event copying Terra is arguably the last thing that Bitcoin needs, given the already shaky macro conditions.

Regardless, the scope for fresh turmoil remains this week as the Fed’s Federal Open Markets Committee (FOMC) prepares for its June policy meeting which starts June 15.

Coming after June 10’s 8.6% inflation readout, expectations are that the gathering will hasten the pace of key rate hikes — something which neither stocks nor crypto assets would welcome.

Krueger, like others, added that the Fed would most likely be the clinch factor in determining the remaining downside for risk assets.

“For the bottom have to wait for the Fed (or equities) to turn,” he wrote:

Currently midway through its cycle, BTC is in a place which has felt like bearish capitulation twice before — in both 2014 and 2018.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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