The price of Bitcoin (BTC) has fallen below the key support level of $20,000 U.S. as a liquidity crisis among cryptocurrency companies intensifies.
Bitcoin is currently trading right around $19,000 U.S., down 5% in the past 24 hours, according to data from CoinDesk.
The world’s largest digital coin has seen its price fall 58% this year and is down more than 70% from its all-time high of $68,000 U.S. reached last November.
Bitcoin has been closely correlated in recent months to the movement of equity indexes such as the Nasdaq stock exchange that is mostly comprised of technology companies.
Global stock markets remain under pressure with the S&P 500 index posting its worst first half of any year since 1970.
At the same time, a liquidity crisis is forming at multiple cryptocurrency companies around the world.
Singapore-based cryptocurrency hedge fund Three Arrows Capital fell into liquidation earlier this week after defaulting on more than $650 million of loans. Cryptocurrency exchange CoinFlex paused withdrawals for customers last week citing “extreme market conditions.”
Several so called “stablecoins” that are supposed to be pegged to the U.S. dollar have also failed or come under pressure in recent weeks, further shaking confidence in the cryptocurrency sector.
TerraUSD, an algorithmic stablecoin, and its sister token Luna collapsed recently, sending ripples throughout the global cryptocurrency sector.
