Recent Bitcoin (BTC) losses caused the token to fall below a key support level, likely setting the stage for further losses in the near future.

BTC dropped below the crucial $20,000 threshold on Saturday, reaching its lowest level since late 2020. After briefly trading below $19,000, it is now trading slightly above that level.

This week’s token declines have caused it to diverge even further from equity markets. While stocks appear to have mitigated some of their recent losses, a flurry of large liquidations and market uncertainty pushed BTC lower.

As more market participants liquidate their holdings, the token now faces even greater losses.

Approximately 72 percent of BTC’s November 2021 record high of nearly $69,000 has been erased by today’s losses. Comparatively, the Nasdaq 100, the closest stock market analog to Bitcoin, is down 28 percent from its peak in December 2021.

Bitcoin has lost roughly 59 percent so far this year, while the Nasdaq has lost 32 percent. The disparity signifies the end of the two-year correlation between BTC and Nasdaq.

The token has performed even worse than common stocks. The Dow Jones Industrial Average has decreased by 18 percent thus far in 2018.

Concerns about rising inflation and interest rate hikes by the Federal Reserve have contributed significantly to market weakness. But BTC’s losses have been exacerbated by problems in the cryptocurrency market.

The Terra crash in May, which wiped out approximately $40 billion in investor funds, has shaken investor confidence in cryptocurrency. Major lender Celsius warned of a liquidity crunch, while hedge fund Three Arrows Capital faces potential insolvency, which only exacerbated the situation.

In addition to BTC being dumped on the open market as a result of the mass liquidations of Celsius and Three Arrows positions, BTC was also dumped on the open market, further depressing prices.

With more liquidations to come, the BTC price is likely to decline further. There are currently few factors that could spur a recovery.

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