Cryptocurrencies have been in a bloodbath.
it tumbled to a low of $20,834 on Monday night, the lowest level since December 2020 and 70% down from its all-time high in November. The No. 1 cryptocurrency is trading at around $22,407 on Tuesday, down 5% over the past 24 hours, according to data from CoinDesk.
it plunged to as low as $1,075, down 78% from its all-time high.
The chaos comes amid a broad sell-off in risky assets. On Monday, the Dow Jones Industrial Average DJIA
fell almost 900 points, while the S&P 500 SPX index
entered a bear market. The Nasdaq Composite COMP
Additionally, investors are concerned by the news that crypto lending platform Celsius halted all customer withdrawals and transfers between accounts, just a month after the Terra blockchain collapse shook investor confidence in some projects. crypto.
Still, most of the crypto crash “has to do with macro, because the crypto markets have tanked since the last CPI figure,” which was released on Friday, Gritt Trakulhoon, an investment analyst at Titan, said in a statement. interview. The US cost of living rose 1% in May, bringing the inflation rate to a 40-year high of 8.6%, showing no signs of slowing.
“I think it’s all macro,” Bill Barhydt, CEO of crypto financial services provider Abra, said in an interview. “We have extreme fear in the markets right now. The market has priced in several rate hikes and has started to price in a serious recession… we are in a completely risk-free mode for all assets, in the same way that we were in a risk-off mode,” Barhydt said.
Anthony Scaramucci, founder and managing partner of SkyBridge Capital, had a different opinion. “If the US market goes down 3% or 4%, could cryptocurrencies go down 5% to 7%? Surely. But I think this outsized drop is the result of the selling pressure that Celsius put on the markets,” Scaramucci said. Bitcoin lost 18% on Monday.
Some analysts expect the decline to continue. The next key support lies around $19,666, which is close to the 2017 high, according to Michael Boutros, Strategist at DailyFX.
Bitcoin is currently “looking to form a local bottom between the $20-$22k range, with a potential bounce towards $26k, however the likely scenario is for the price to drop further towards the $14-$17k range where a bottom cyclical can potential form,” Abdul Gadit, chief financial officer and co-founder of Zignaly wrote in an email.