The industry was on edge on Monday as it struggled to stay above the key level, with investors fearing that problems at major players could cause a wider market shakeout.
The world's biggest coin was trading just under the symbolic level of $20,000 in early London trading hours - roughly the peak of its charge to its previous record in 2017.
On Saturday, the price of the virtual currency had dropped to as low as $17,592. It was below $20,000 for the first time since December 2020, and fell below 78. It lost 60% of its value this year and 37% this month in the latest meltdown of the criptocurrency sector.
Its fall comes after problems with several major industry players. Market players said that future declines could have a knock-on effect, as other investors are forced to sell their holdings to meet margin calls and cover losses.
The founders of Three Arrows Capital told the Wall Street Journal on Friday that they would suspend withdrawals due to the fact that Asia-focused criptocurrency giant Babel Finance has said it will suspend withdrawals.
U.S. based lender Celsius Network said this month it would suspend customer withdrawals. In a blog on Monday, Celsius said it would continue working with regulators and officials, but it wouldn't pause its customer Q&A sessions.
Adam Farthing, chief risk office for Japan, said that there is a lot of credit being withdrawn from the system and that if lenders have to absorb losses from Celsius and Three Arrows, they will reduce the size of their future loan books, which will reduce the amount of credit available in the criptocurrency ecosystem.
It feels like 2008 to me in terms of how there could be a domino effect of bankruptcies and liquidations, Farthing said.
Smaller tokens, which usually move in tandem withbitcoin, were also hurt. The 2 token ether was at $1,0752, having dipped below its symbolic level of $1,000 over the weekend.
The fall in cryptocurrencies markets coincides with a slide in equities as the U.S. stocks suffered their biggest weekly percentage decline in two years due to rising interest rates and the growing likelihood of a recession.
Like other risk assets, such as tech stocks, the moves of digital currency have tended to follow a similar pattern.
According to Coinmarketcap, the market value of the criptocurrency is around $877 billion, down from a peak of $2.9 trillion in November 2021.
A fall in stable coin, a type of coin designed to hold a steady value, suggests investors are pulling money out of the sector as a whole.