Bitcoin Falls Below $20K As 2023 Rally Reverses
The price of bitcoin (BTC) has fallen below the $20,000 level for the first time since mid-January as a wave of bearish news has overwhelmed crypto's strong 2023 uptrend.
The largest cryptocurrency by market capitalization quickly regained some of its lost ground late Thursday (ET) and was recently hovering at about $20,040, down 7.7% over the past 24 hours.
After reaching a record high over $69,000 in November 2021, bitcoin tumbled late that year and all through 2022 to begin 2023 at around $16,600. A powerful rally into mid-February had bitcoin ahead more than 50% for the year at one point to $25,000.
Events since, though, have given ample reasons for sellers to emerge. Among them was a stronger-than-expected inflation report that called into question the U.S. central bank's early 2023 assertion that a disinflation trend had begun. The Federal Reserve itself has acknowledged as much, with its Chair Jerome Powell earlier this week telling Congress that the central bank has far more work to do to bring inflation back to its 2% target.
In addition to interest rate fears, there was the collapse of crypto-friendly lender Silvergate Bank on Wednesday evening. Also on Wednesday, the U.S. Department of Justice moved 49,000 bitcoin seized from darknet marketplace Silk Road to new addresses, suggesting that the government may have interest in soon selling that sizable stash.
"Silvergate is one of several factors in Bitcoin’s underside test, " Joe DiPasquale, CEO of crypto fund manager BitBull Capital, wrote in an email to Coindesk. "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."
DiPasquale 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."
James Rubin contributed reporting to this story.
UPDATE (March 9, 2023, 1:10 UTC): Adds most recent bitcoin pricing.