Bitcoin is in its worst week since the FTX crash

The largest cryptocurrency to drop below $20,000

Bitcoin is now going through the worst week since November, as combined factors affected investor sentiment, such as selling pressure that hit stocks, in addition to fear of increasing interest rates, as well as the escalation of the US regulatory campaign on cryptocurrencies.

The price of Bitcoin, the largest cryptocurrency, fell by 3.2% today, Friday, to fall below the $20,000 level for the first time since January, after dropping more than 8% on Thursday. Minor coins like Ether, Solana and Cardano also added to their losses.

The collapse of bank stocks in the United States on Thursday raised fears that rising borrowing costs will result in a bleak economic and investment outlook. And in New York, the state regulator sued the popular cryptocurrency exchange KuCoin and claimed in court that it had treated the second largest currency, ether, like a security. The US Securities and Exchange Commission also claims that many cryptocurrencies are securities, a designation that would make trading them more difficult.

A decline driven by stock market turmoil

It appears that the selling pressure in cryptocurrencies is largely driven by the stock market, said John Toro, Head of Trading, Digital Asset Exchange Independent Reserve. He added that the liquidation of the bank (Silvergate Capital Corp), famous for the cryptocurrency sector, as well as President Joe Biden's proposal to impose a series of tax increases on investors and high-income Americans contributed to the selling pressure.

Bitcoin is down 13% so far this week, the biggest drop after its weekly drop of 23% in November amid the collapse of Sam Pinkman Fried (FTX) platform.

Among the smaller tokens, Huobi's native token (HT) pulled dealers' attention after quickly losing half its value on Thursday before paring some of its losses. Its decline reached 21% in the past 24 hours. Justin Sun, a Chinese-born crypto magnate and advisor to Huobi, said a $100 million fund was set up to improve the platform's liquidity level.

Sentiment in digital asset markets as a whole was hit by the collapse of cryptocurrency payments platform Silvergate as well as Chairman Jerome Powell's suggestion that the Federal Reserve will raise interest rates higher than previously expected.

Edmund Goh, Head of Trading at B2C2, said: "Crypto issues coinciding with stock market turmoil is the perfect recipe for volatility.

Bitcoin price prediction

Bitcoin has now fallen below its 200-day moving average which, according to some analysts, could herald further declines.

Tony Sycamore, market analyst at IG Australia, expected the token to trade near the lower boundary of the $15,500 to $25,000 range and added risk sentiment has deteriorated this week.. Powell was more hawkish than the markets had expected.