Bitcoin Dips Below $20,000 as Crypto Market Pressure Intensifies

Bitcoin has once again slumped below the psychological mark of $20,000 on Wednesday morning, a level last seen on June 22.

At the time of writing, the leading cryptocurrency is trading at $19,998, down 5.27% over the past 24 hours, according to data provided by CoinMarketCap.

The rest of the market is firmly in the red too.

Ethereum, the industry’s second-largest cryptocurrency, fell 7.45% in the day and is currently priced at around $1,128.

Other top cryptocurrencies have also fallen. Solana (SOL) is down by 9.8%, trading at $35.16, Avalanche (AVAX) fell 6.82% to $18.21, Binance Coin (BNB) fell 8.39% to $219.62.

Bitcoin pulls crypto market lower

The latest price action, which also saw the cumulative market capitalization of all cryptocurrencies plummet below $900 billion, can be seen as yet another sign of investor uncertainty and the increasing pressure on the industry’s major players.

According to the latest CoinShares report, outflows for Bitcoin-specific funds totaled $453 million, essentially wiping off all the inflows made over the past six months. In other words, investors feel less comfortable about risky assets and are rotating out of cryptocurrencies.

The deteriorating sentiment among investors was further evidenced on Tuesday, as Canada-based investment firm Cypherpunk Holdings sold 100% of its Bitcoin and Ethereum holdings.

Per the company’s announcement, Cypherpunk sold 205.8 Ethereum for $227,600 and 214.7 Bitcoin for $4.7 million. The firm said it accrued a total of $5 million in proceeds from the sale of the two largest cryptocurrencies while maintaining cash and stablecoins on hand.

“We continue to see systemic risks propagating throughout the crypto ecosystem and, in our assessment of the risk-reward and opportunity costs involved in holding asset tokens, we believe that the most prudent approach is to sit on the sidelines as we wait for the volatility and illiquidity contagion to come to its logical conclusion,” Jeff Gao, Cypherpunk President and CEO, said.

The market downturn is also forcing more companies to assess their cost management practices, with leading European crypto broker Bitpanda joining the growing list of firms to announce staff layoffs.

The Vienna-based company, which last August was valued at $4.1 billion, decided to slash its headcount from 1,000 employees to 730, citing changing market sentiment, geopolitical tensions, rising inflation, and concerns of a looming recession among the reasons for the layoffs.