Bitcoin temporarily dipped below $19,000 on Thursday, as the world’s largest digital currency remains under pressure from macroeconomic concerns and a liquidity crisis among high-profile cryptocurrency firms.

According to CoinDesk data, Bitcoin was trading at $19,143.50 at 6:10 a.m. ET, down 4 per cent from the previous day. The digital currency is down over 58 per cent so far this year and has dropped more than 70 percent from its all-time high of $68,990.90 in November.

“Bitcoin continues to be under pressure as other assets are. The mix of high inflation, rising interest rates and recession weigh on cryptocurrencies,” Yves Longchamp, head of research at digital asset-focused SEBA Bank, told CNBC via email.

Global stock markets are under pressure, with the S&P 500 in the United States on course for its worst first half-year performance since 1970.

Bitcoin has been found to be highly associated with the movement of equity indexes, particularly the Nasdaq. Stocks have been under pressure, which has dragged on bitcoin’s price.

Investors are particularly concerned about the high level of inflation, which is pressuring global central banks to hike interest rates. This is also fueling fears of a recession in the United States and other countries.

The crypto price drop exposed the industry’s highly leveraged structure and sparked a liquidity crisis across organisations.

Three Arrows Capital, a cryptocurrency hedge fund, went bankrupt this week, according to a person familiar with the situation.

The firm was exposed to the now-defunct terraUSD algorithmic stablecoin and its companion cryptocurrency luna. Three Arrows Capital, or 3AC, is also said to have failed to meet a margin call from BlockFi.

A margin call occurs when an investor is required to commit additional funds in order to avert losses on a deal done with borrowed funds.

Meanwhile, cryptocurrency exchange CoinFlex halted user withdrawals last week, citing “extreme market conditions.” In addition, CoinFlex CEO Mark Lamb stated that long-time cryptocurrency investor Roger Ver owed the company $47 million. Ver denies owing the exchange money.

To make up the $47 million shortfall, CoinFlex is launching a new coin. In an interview with CNBC on Wednesday, Lamb stated that CoinFlex is in talks with several large funds interested in purchasing the coin. He also stated that customer withdrawals would not resume on Thursday as planned.

“In this environment, pressure on bitcoin and other crypto assets remain,” Longchamp said given the uncertainty over whether the deleveraging of the industry is over.

(Adapted from CNBC.com)