Bitcoin hovers around the $20,000 level after a volatile weekend

Bitcoin struggled to hold above the closely-watched $20,000 level, extending a period of marked volatility that saw huge weekend swings.

The largest cryptocurrency fell as much as 4.8 per cent to $19,618 on Monday in Asia and was trading at $20,014 as of 11.09am in Tokyo. Ether at one point shed 6.6 per cent but held above $1,000.

Solana, Cardano and Dogecoin were in the red.

Bitcoin sank almost 15 per cent on Saturday but then vaulted back above $20,000 with a 16 per cent surge on Sunday. The pattern of swings suggest investor sentiment remains highly fragile as the Federal Reserve goes full-throttle to fight inflation with interest-rate hikes that drain liquidity from markets. “Expect more pockets of forced selling of Bitcoin and Ether as the market figures out who is swimming naked,” Arthur Hayes, co-founder of crypto exchange BitMEX, said on Twitter.

He said he doesn’t know if the selling is over but “for those skilled knife-catchers, there may yet be additional opportunities to buy coin from those who must whack every bid no matter the price.”

Bitcoin is down about 57 per cent since the start of the year, with many other tokens down even more.

Developments like lender Celsius freezing withdrawals and decentralised-finance applications taking unprecedented measures to protect themselves against cascading liquidations have injected further uncertainty into the industry.