[Bitcoin Now] "Abnormal Liquidity Pressure"... Weakness Following Babel Finance Withdrawal Suspension News

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] Bitcoin prices are declining following news that Babel Finance, a cryptocurrency-related lending company, has suspended deposit withdrawals.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 3:43 PM on the 18th, Bitcoin was priced at $20,040 (approximately 26.42 million KRW), down 1.18% from the previous day.

Bitcoin prices have been falling after news broke that Babel Finance, headquartered in Hong Kong, halted deposit withdrawals. Although the US Nasdaq index, which is tech stock-centered and shows synchronization phenomena, closed up 152.25 points (1.43%) at 17,980.35, the impact was felt.

US economic media CNBC reported, "Babel Finance moved to pay customers following the cryptocurrency market downturn but temporarily suspended cryptocurrency withdrawals and redemptions on the 17th (local time)." Babel Finance explained, "Recently, significant volatility has appeared in the cryptocurrency market, and some institutions are experiencing a chain risk event. Due to this situation, we are under abnormal liquidity pressure." Babel Finance's average monthly derivatives trading volume is known to be $800 million (about 1.036 trillion KRW), and options products exceed $20 billion.

Previously, Celsius, a cryptocurrency collateral lending company, also announced a temporary suspension of customer asset withdrawals due to a bank run. Celsius had been providing loans using stETH, an Ethereum staking token issued by the DeFi platform Lido, as collateral. However, suspicions arose that Celsius concealed losses, raising doubts about payments, which led many customers to demand repayment, triggering a bank run.

Meanwhile, the Digital Asset Fear & Greed Index by Dunamu, which operates the domestic cryptocurrency exchange Upbit, recorded 16.82 on the day, indicating a "Extreme Fear" stage. This is a drop of 13.50 from 30.32 on the 11th of this month, a week earlier. Dunamu's Digital Asset Fear & Greed Index is divided into stages: "Extreme Fear (0?20)," "Fear (20?40)," "Neutral (40?60)," "Greed (60?80)," and "Extreme Greed (80?100)." The greed direction indicates increased interest in buying by market participants, whereas moving toward fear reflects a fear of asset decline, causing market exits and a chain reaction of price drops.