Bitcoin fell to $21,000 for a brief time Tuesday in Asia, but then rebounded slightly as investors sold risk assets.
According to Coinbase data, the world’s biggest cryptocurrency lost nearly 14% over the last 24 hours while ethereum fell more than 12% during the same time period.
On Tuesday, Bitcoin hovered at $21,800 in Asia.
“Everything’s on fire right now,” stated Nirmal Ranga (head of trading and technical analysis, crypto exchange ZebPay).
“What you see in the market are… fear and uncertainty. He said that technically, markets appear oversold. “There has to be some floor in bitcoin that we’re going hit in the future.”
On Monday, crypto assets were hit hard as some trading platforms like Celsius and Binance stopped withdrawing funds and companies cut jobs.
Celsius stated that withdrawals, swaps and transfers between accounts would be stopped due to “extreme market conditions” as well as the move was intended to stabilize liquidity and operations.
The company stated in a memo that it took this action to ensure Celsius was better able to fulfill its withdrawal obligations over time.
Binance, the largest cryptocurrency exchange in the world, stopped bitcoin withdrawals for more than three hours because of a “stuck transaction” that was causing a backlog.
According to CoinMarketCap data, the market capitalization of cryptocurrencies fell below $1 trillion Monday. This was the first time it has been below that level since February 2021. In the last few days, around $200 billion was wiped from the market.
As investors shun risky assets, the crypto sell-off is occurring against a background of concerns over a possible global recession and major central banks raising interest rates to control inflation.
According to CNBC’s Steve Liesman, policymakers at the U.S. Federal Reserve may consider a 75-basis point rate hike later in the week. This is a much larger increase than the 50-basis point hike traders were used to. The Wall Street Journal first reported the story.
Rising rates can make future earnings from growth assets less appealing.
Bitcoin is now down nearly 70% since November 2021, when it reached its peak.
