Bitcoin has lost more than 10% of its value in the past 24 hours, dropping to its lowest level since December 2020 at less than $24,500 early Monday morning (June 13), part of a $150 million selloff of cryptocurrency that is also seeing investors walk away from other risky assets, CNBC reported.
That upheaval in the crypto space has been punctuated by lending company Celsius’ decision to pause any withdrawals for its customers, making investors wonder how widespread the plunge of the digital currency will become, the report says.
Bitcoin, the world’s largest cryptocurrency, was trading at around $24,250 at 05:40 a.m. ET on Monday. The cryptocurrency market as a whole lost more than $150 billion in value over the weekend and into the new work week, the report says, sparked by ongoing inflation and the expected increase in interest rates by the U.S. Federal Reserve this week in a move to control rising prices.
Nasdaq plunged as investors sold off many of their tech-related stocks last week, a move that’s often been bad news for the value of bitcoin and other cryptocurrencies, the report says.
“Since November 2021, sentiment has changed drastically given the Fed rate hikes and inflation management,” Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, told CNBC. “We’re also potentially looking at a recession, given the Fed may need to finally tackle the demand side to manage inflation.
“All this points to the market not completely having bottomed, and unless the Fed is able to take a breather, we’re probably not going to see bullishness return,” he said.
Bitcoin has lost about two-thirds of its value from its record high in November. In previous bear markets, the token has shed about 80% from its top value, Ayvar told CNBC, so the worst might still be to come.
“We could see much lower bitcoin prices over the next month or two,” Ayyar said.
Meanwhile, Celsius, which claims to have 1.7 million customers, said “extreme market conditions” led it to stop all withdrawals on the platform. The company’s eponymous coin has lost more than 50% of its value in the past 24 hours.
Related: Crypto Cuts Losses Sparked by Inflation Data
Analysts told Bloomberg that if bitcoin was below the high $20,000s level, there was a possibility it could go down quickly, with levels like the 200-week moving average near $22,000.
Sign up here for daily updates on all of PYMNTS’ Crypto coverage.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More