Bitcoin and ethereum have dropped more than 10% over the last 24 hours, with bitcoin going below $30,000 for the first time since July 2021 and ethereum trading near $2,200. And one expert warns bitcoin could drop even further.
The world’s largest cryptocurrency, bitcoin, fell to $31,075.70 on Monday evening, a 10% drop from Sunday at 5 p.m. EDT, according to prices from CoinDesk. Bitcoin’s price has fallen 54% from its record high of $67,802 in November.
It is on track for the worst five-day stretch since the five days ended March 16, 2020, when it fell almost 38%.
Ethereum, the second-largest cryptocurrency, fell Monday to $2,286.10, almost 10% below the price Sunday evening.
“The overall market has noticed the high correlation to Bitcoin prices and the general equities markets,” says Armando Aguilar, head of alternative strategies and research for Ledn, a digital asset savings and credit platform. “The S&P 500 and NASDAQ have had the largest correlations to Bitcoin with 0.88% and 0.91%, respectively. A correlation of one means that they move equally one to the other.”
For weeks, the crypto market — like the stock market — has also been under pressure as investors grapple with continued surging inflation, the ongoing swirl of economic events stemming increasingly from Russia’s invasion of Ukraine, and tighter U.S. monetary policy by the Fed.
The tech-heavy Nasdaq Composite hit a new 52-week low on Monday, falling 26% year to date.
Crypto prices have been stagnant for much of 2022 as investors brace for rising interest rates. The crypto market has been active over the past 24 hours, with almost $155 billion in market volume in that period, according to CoinMarketCap. The global crypto market fell to $1.4 trillion.
Bitcoin began to descend at the end of last week and continued to fall throughout the weekend, trading between a relative range of $33,000 and $37,000. Bitcoin’s big drop Monday is just the latest reminder for investors that crypto assets come with extra risk and volatility, especially in times of economic and political uncertainty like we’re in now.
“Bitcoin is breaking below some key technical levels as the never-ending selloff on Wall Street continues. The institutional investor is paying close attention to bitcoin as many who got in last year are now losing money on their investment,” Edward Moya, senior market analyst at foreign-exchange brokerage Oanda, wrote in a market analysis. “If the USD 30,000 level breaks, that could trigger a flash crash environment if several whales unload. ”
But Bitcoin’s new low doesn’t come as a surprise to Wendy O, who in April predicted Bitcoin would hit $33,000 sometime before July, based on her technical price charts.
Ethereum’s price has been rapidly declining over the last few days, trading at $2,300 Monday. Ethereum is down 18% over the past week amid a big retreat in Bitcoin and the stock market.
Like all cryptocurrencies, Ethereum tends to follow Bitcoin’s lead. If Bitcoin is falling in price, ethereum is likely falling, too. But ethereum has also been grappling with anticipation for its massive software upgrade.
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