(Kitco News) - It has been a rough start to the week for the crypto market, with prices extending the downtrend that began the second half of last week as investors around the globe brace for a possible 100 basis point hike in interest rates from the Fed.
As a result of the continued weakness, Bitcoin (BTC) briefly lost support at $19,000 and fell to an intraday low of $18,265 before bullish reinforcements arrived in force to bid it back above $19,100.
BTC/USD 4-hour chart. Source: TradingView
The early pullback was noted in the morning Bitcoin brief from senior Kitco market analyst Jim Wyckoff, who highlighted that Monday’s dip saw BTC “hit a three-month low.” The drawdown has given bears the upper hand, according to Wyckoff, who warned that further declines are a very real possibility.
“A drop in prices below chart support at the previous September low has given the bears the overall near-term technical advantage and also suggests a new leg down in prices.”
Insight into what such a move could look like was provided by independent market analyst il Capo of Crypto, who posted the following tweet highlighting a downside target of $14,000 to $16,000 for Bitcoin.
$BTC
— il Capo Of Crypto (@CryptoCapo_) September 19, 2022
Similar to ETH. Little bit lower to 18000-18100, quick scam pump to 20300-20600, then new lows.
Main target: $14k-16k pic.twitter.com/C52WTqZM5a
A mixed bag of data for Bitcoin
It’s been a rough journey for Bitcoin since it hit an all-time high of $68,789.63 in November 2021. Since that time, its price has declined by more than 73%, causing its total market cap to plummet from $1.27 trillion to under $354 billion currently.
Monday’s weakness comes ahead of a week where global lending rates could rise by a combined 500 basis points, or 5%, according to data compiled by Bloomberg.
Central banks' rate decisions in the week ending Sep. 24. Source: Bloomberg
This includes possible rate hikes from the U.S. central bank, Sweden's Riksbank, the Swiss National Bank, Norway's Norges Bank, the Bank of England, among others.
Needless to say, the prospect of interest rate hikes from multiple central banks hit risk assets hard, especially for those looking to trade with leverage.
According to data from Coinglass, this latest downturn resulted in more than $237.2 million worth of funds liquidated on BTC futures exchanges, with longs suffering $176 million of the total losses.
Total liquidations. Source: Coinglass
Meanwhile, the Bitcoin network has never been stronger, with data from Blockchain.com showing that the network’s hash rate is now at an all-time high of 225.7 EH/s.
Bitcoin network hash rate over time. Source: Blockchain.com
The network’s difficulty rate is also currently at a record high of 32.045 T, showing that interest in mining Bitcoin has never been higher despite the weakness in price over the past ten months.
Altcoin values plummet
The weakness in BTC led to even more pronounced declines in the altcoin market, with few coins spared from the carnage as traders fled to the safety of stablecoins.
Daily cryptocurrency market performance. Source: Coin360
The top altcoin Ether (ETH) continued its slide lower since the successful completion of its Merge on Sept. 15, falling to a low of $1,282 in the early hours on Monday before dip buyers managed to bid it back above support at $1,300.
The best performers out of the top 200 tokens, according to CoinMarketCap include a 9.52% gain for BinaryX (BNX), a 5.77% increase for Helium (HNT) and a 3.51% increase for SwisBorg (CHSB).
The overall cryptocurrency market cap now stands at $928.5 billion, and Bitcoin’s dominance rate is 39.5%.
