Bitcoin Drops Below $21,000 Briefly As Crypto Sell-Off Continues

(CTN News) – The price of Bitcoin (BTC) briefly fell below $21,000 on Tuesday morning, making it the world’s largest cryptocurrency by market capitalization’s 52-week low.

According to CoinMarketCap data, Bitcoin briefly fell below $21,000 on Tuesday before bouncing back slightly to around $22,620, continuing its plunge as investors sold risky assets.

In the past 24 hours, bitcoin has fallen about 10%, while Ethereum has dropped more than 6%, according to CoinMarketCap. Bitcoin’s market capitalization is currently $430 billion, down over 66% from its all-time high of $68,789 in November 2021.

Coinglass reports that Bitcoin led liquidation in the cryptocurrency market with $531.62 million liquidated over the past 24 hours.

Bitcoin’s fear and greed index hit 8 out of 100, its lowest level since May 2022, indicating extreme anxiety in the market.

Earlier today, Ethereum (ETH), the second-largest cryptocurrency, hit a 52-week low of $1,094.70. ETH is currently trading at $1,220, up 1.3%.

 Nirmal Ranga, the head of trading and technical analysis at crypto exchange ZebPay, explained in an interview with CNBC that “everything is on fire right now, be it the equities, be it the crypto assets, or anything else.”

The market is characterized by fear, uncertainty, and doubt. “Technically, markets look oversold, and we are probably going to hit some floor in bitcoin in the near future.” Nirmal said.

Why did Bitcoin Crash?

Among the primary reasons behind today’s bearish price action are global inflation rates, the U.S. Federal Reserve’s rate hikes, Celsius and Binance’s withdrawal halts, and some companies cutting jobs.

In response to “extreme market conditions,” Celsius halted withdrawals, swaps, and transfers between accounts on Monday in order to “stabilize liquidity and operations.”

On Monday, Binance, the world’s largest crypto exchange, halted bitcoin withdrawals for over three hours due to a stuck transaction. These two events caused a backlash on Bitcoin, causing the crypto market to lose around $200 billion recently.

Inflation is also a global phenomenon, affecting all significant economies. The U.S. inflation rate reached a 40-year high of 8.6%, but America isn’t alone. In May 2022, the inflation rate of European countries increased, including Germany (7.9%), France (5.25%), the Netherlands (8.8%), and the United Kingdom (9%). Globally, inflation is increasing due to the rising fuel prices and changing supply-chain dynamics resulting from Russia’s ongoing invasion of Ukraine.

According to the Wall Street Journal, the U.S Federal Reserve is expected to implement a 0.75% of a rate hike as a method to control inflation, which would vastly increase bond yields.

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