Bitcoin and the entire cryptocurrency market have reached lows not seen since January of 2021.
Bitcoin’s (BTC) price level has now fallen below $30,000, reaching the price of $28,228 just a short while ago. That’s Bitcoin’s cheapest price since January 4th, 2021, erasing most of the gains of the 2021 crypto bull run that saw Bitcoin reach levels above $68,000.
The price of BTC currently resides at $28,600 which is close to an 8% decrease for the day alone. The entire altcoin crypto market is struggling as well, with Ethereum (ETH) straddling the line of $2,000 as support. According to Coinglass, traders are feeling the pain of the crypto market and over $1 billion has been liquidated over the last 24 hours.
MicroStrategy at risk of Bitcoin position liquidation?
MicroStrategy who took out a silvergate loan earlier this year and used the loan to add to its Bitcoin position by 4,167 Bitcoins, making the total BTC holding 129,218 BTC in total is in risk of having some of its BTC position liquidated. Liquidation means that one’s collateral is no longer sufficient to cover the position and they are forced to sell their holdings at current prices. According to CEO Michael Saylor there is still a long way to go until MicroStrategy will face liquidation, as the price would need to fall to $21,062.
However, should it reach this level, Saylor says he will simply pledge more of the remaining 115,109 Bitcoin (BTC) to the loan. If entirely pledged, the loan would remain intact until a price as low as $3,562 – at that time MicroStrategy would still be able to commit other forms of collateral.
Other contributing factors to the Bitcoin and crypto markets latest downswing include Terra Luna crashing by over 90% in just a few days due to its stable coin UST losing its peg to the US dollar as well as continued inflation and the stock market trending lower.