BTC falls below $25k.
Amid a general sell-off in risky assets, BTC fell below $25,000 on Sunday, reaching its lowest level since December 2020, CNBC reported.
According to CoinDesk, the world’s largest cryptocurrency was trading around the $24,653.99 mark at 04:24am ET (08:24 GMT) on Monday.
The overall cryptocurrency market lost more than $150bn over the weekend and Monday morning.
“The bearish trend in the risky asset market is being supported by macroeconomic factors while inflation continues and the US Federal Reserve is expected to raise its interest rate this week to curb price increases. Bitcoin and other cryptocurrencies tend to correlate with stocks and other risky assets, and when those indices fall, as happened last week with the Nasdaq, cryptocurrencies fall too.
The cryptocurrency market has been almost “on edge” since mid-May, when algorithmic stablecoin TerraUSD, or UST, and its sister cryptocurrency Luna collapsed.
Meanwhile, cryptocurrency lender Celsius added fuel to the fire by suspending withdrawals from its customers’ accounts, raising fears of a crisis spreading to the broader crypto market. Celsius claims to have 1.7 million customers who can earn an 18% return through its platform: to do so, users must deposit their cryptocurrency into Celsius. This cryptocurrency is then lent to institutions and other investors, and users receive income as a result of Celsius’ profits.
But the sell-off in the cryptocurrency market has taken its toll on the company: according to its website, it had $11.8 billion in assets as of May 17, down from more than $26 billion last October.
According to CoinGecko, CEL, Celsius’ own cryptocurrency, has fallen by more than 50% in the past 24 hours.
According to Vijay Aiyar, vice president of corporate and international development at cryptocurrency exchange Luno, “Market sentiment has changed dramatically since November 2021 due to the Fed’s rate hike and the fight against inflation. We could potentially face a recession as the Fed may have to finally address demand to manage inflation. All this indicates that the market has not yet fully bottomed out and unless the Fed can pause, we probably won’t see a return of bullish optimism.”
In previous bearish trends, bitcoin has fallen around 80% from its last record high. It is now down about 63% from its last all-time high in November last year.
“We could see a much lower bitcoin value over the next month or two,” said Aiyar