Bitcoin Falls 8%, Drops Below $62K Before Rebound

In simpler terms, the DeFi industry has suffered significantly during market turbulence. Low prices have triggered liquidations, increasing the risk of disruption for certain platforms.

Among the protocols being closely watched is Ethena, the buzzy Ethereum project behind USDe, a “synthetic dollar” built to mirror the price of the US dollar. Ethena has attracted more than $2 billion in deposits, but it uses a controversial method for maintaining USDe’s one-dollar “peg” that hasn’t been tested under such adverse market conditions.

Last weekend’s market downturn had an unclear direct cause, but Arthur Hayes, ex-CEO of BitMEX, predicted in a blog post that dollar liquidity could decrease before U.S. tax payments are due on April 15. This impending event might result in lower prices according to his assessment.

Read more: Bitcoin Could Slump Around Reward Halving Time, Arthur Hayes Says

The decreases occurred simultaneously with Iran’s response – drone and missile attacks against Israel – alleging Israeli responsibility for an airstrike on their consulate in Damascus, Syria.

The prices in the cryptocurrency market started to bounce back after the Iranian UN mission’s X account (previously Twitter) announced that the issue was resolved. However, they issued a cautionary note, indicating that a much more serious retaliation could ensue if Israel made another misstep.