{"id":163071,"date":"2022-09-01T21:37:05","date_gmt":"2022-09-01T21:37:05","guid":{"rendered":"https:\/\/precoinnews.com\/?p=163071"},"modified":"2022-09-01T21:37:05","modified_gmt":"2022-09-01T21:37:05","slug":"bitcoin-plummets-but-is-there-more-downside-ahead","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/crypto\/bitcoin-plummets-but-is-there-more-downside-ahead\/","title":{"rendered":"Bitcoin Plummets but is there More Downside Ahead?"},"content":{"rendered":"

By Marcus Sotiriou, Analyst<\/em>\u00a0at the\u00a0UK based digital asset broker\u00a0<\/em>GlobalBlock<\/em><\/p>\n

Despite the Nasdaq bouncing 0.21% yesterday and both the S&P 500 and Nasdaq futures showing gains this morning, Bitcoin continues to plummet. What are the factors contributing to this extreme sell off?<\/p>\n

Systemic issues in crypto infrastructure companies such as Celsius<\/strong><\/p>\n

Celsius are one of the biggest lenders and could potentially become insolvent. The Celsius on-chain liquidity crisis has become healthier over the past 24 hours, as they have added to their collateral across the board for 3 main positions. One of these positions involving a Maker wBTC Vault now has a liquidation price of $14k, which was once around $22,500. This is because they have paid down more of their DAI debt.<\/p>\n

There is a clearly a high level of uncertainty right now, in regard to the significant exposure Celsius has to stETH in proportion to the Curve pool size.<\/p>\n

I think many people are waiting for more information with their stETH position, so they can have confidence to buy again \u2013 if a Celsius deal is reached and publicised this could lead to a relief rally.<\/p>\n

Insolvency of crypto hedge funds like 3 AC (Three Arrows Capital)<\/strong><\/p>\n

This is one of the biggest crypto hedge funds, and one of the biggest borrowers. At its peak, it owned over 5 billion dollars of assets and hundreds of thousands of ETH. If they collapse, this will mean that lenders would incur drastic economic risk. The Profit-Loss difference between how much they owed versus what they get in liquidating their collateral is at risk.<\/p>\n

Lenders will be forced to protect themselves by withdrawing credit from the system and result in further de-leveraging of crypto assets. I think it is likely that more people need to de-lever still.<\/p>\n

Unwind of liquidity in global markets due to rate hikes and QT<\/strong><\/p>\n

QE has led to global markets and crypto rising over the past couple of years, but the opposite has meant that investors are forced to unwind their positions, particularly in risk-on assets. We have the Federal Reserve interest rate decision today at 7pm UK time, which will be determine how aggressive they decide to be and therefore the outlook over the next 6 months. I think a very aggressive Federal Reserve might be the best way forward for markets, so that the Federal Reserve will be able to resume QE sooner.<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By Marcus Sotiriou, Analyst\u00a0at the\u00a0UK based digital<\/p>\n","protected":false},"author":3,"featured_media":163070,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"\nBitcoin Plummets but is there More Downside Ahead? - Pre Coin News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/precoinnews.com\/crypto\/bitcoin-plummets-but-is-there-more-downside-ahead\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bitcoin Plummets but is there More Downside Ahead? - Pre Coin News\" \/>\n<meta property=\"og:description\" content=\"By Marcus Sotiriou, Analyst\u00a0at the\u00a0UK based digital\" \/>\n<meta property=\"og:url\" content=\"https:\/\/precoinnews.com\/crypto\/bitcoin-plummets-but-is-there-more-downside-ahead\/\" \/>\n<meta property=\"og:site_name\" content=\"Pre Coin News\" \/>\n<meta property=\"article:published_time\" content=\"2022-09-01T21:37:05+00:00\" \/>\n<meta name=\"author\" content=\"mediabest\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/precoinnews.com\/wp-content\/uploads\/2022\/09\/Bitcoin-Plummets-but-is-there-More-Downside-Ahead.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"mediabest\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/precoinnews.com\/crypto\/bitcoin-plummets-but-is-there-more-downside-ahead\/\",\"url\":\"https:\/\/precoinnews.com\/crypto\/bitcoin-plummets-but-is-there-more-downside-ahead\/\",\"name\":\"Bitcoin Plummets but is there More Downside Ahead? 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