Bitcoin falls 8% dropping below 62000 dollar before rebounding
The price of the largest digital asset, Bitcoin {{BTC}}, dropped below $62,000 for a brief period on Saturday before rising to over $64,000 as of press time, causing the market for cryptocurrencies as a whole to lose almost 10% of its value.
It wasn’t alone; according to CoinGecko, other significant digital assets witnessed comparable declines over the previous 24 hours, including ether {{ETH}}, which dropped 7% to just under $3,000, BNB {{BNB}} (down 9%), and solana {{SOL}} (down 12%). During that same time frame, trading volume has increased.
The market instability has had a particularly negative impact on the decentralised finance (DeFi) industry, since low prices have forced liquidations and increased the risk of chaos for certain protocols.
Ethena, the popular Ethereum project that created USDe, a “synthetic dollar” designed to mimic the value of the US dollar, is one of the protocols that is being attentively observed. Although Ethena has drawn deposits totaling over $2 billion, it maintains the USDe’s one-dollar “peg” through a contentious approach that hasn’t been put to the test in such unfavourable market circumstances.
Although former BitMEX CEO Arthur Hayes predicted in a blog post last week that dollar liquidity would collapse just before U.S. tax payments are due on April 15—this coming Monday—the exact source of Saturday’s market drops remained unclear. According to him, decreased liquidity would result in cheaper pricing.
The decreases coincided with Iran’s deployment of drones and missiles against Israel, which the Iranian authorities said was reprisal for an Israeli-aligned bombing on its consulate in Damascus, Syria.
After Iran’s Permanent Mission to the UN declared on Twitter that “the matter can be deemed concluded,” the price of cryptocurrency started to rise, despite a warning of a “considerably more severe” strike “should the Israeli regime make another mistake.”