Home / Markets / Cryptocurrency /  Bitcoin bleeds dragging crypto market, hits 18-months low

Bitcoin continued its great fall on Wednesday hitting an 18-months low and deepening crypto markets crash. The free fall comes after multi-decadal inflation, expectations of an aggressive interest rate hike, and freezing of withdrawals by crypto lender Celsius. There is a high co-relation between cryptocurrency and stock market as they both sharply witness bearish tone. The global crypto market even erased $900 billion valuations.

As per CoinMarketCap, currently, Bitcoin is trading at 20,855.09 down by 7.27%. It has touched an intraday low of $20,178.38. Meanwhile, at the current market price, Bitcoin's valuation is around $397.67 billion. Bitcoin's dominance dropped 0.44% to 44.66% over the previous day.

The global market traded at $889.89 billion down by 6.39% over the last day/ The total cryptocurrency market volume over the last 24 hours stood at $98.24 billion, which makes an 18.76% decrease.

At the latest price, Bitcoin's valuation has nosedived by over 31%. However, compared to the day's low, the crypto leader's weekly fall is more than 34%.

Compared to its all-time high of $68,789.63 witnessed in November last year, Bitcoin has plummeted by nearly 71% as of today.

On Monday, Celsius announced the pausing of all withdrawals, Swap, and transfers between accounts due to extreme market conditions. It said, "We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations."

"We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect assets. Furthermore, customers will continue to accrue rewards during the pause in line with our commitment to our customers," Celsius added in a statement.

On the Celsius halt of withdrawals, Vetle Lunde analyst at Arcane Research in his note on Tuesday said, "Celsius has previously attracted customers by offering higher yields than its main competitors. This offering has likely been enabled due to Celsius being involved in more exotic yield strategies than their peers."

Lunde's data stated that Celsius lost funds in two major exploits over the last year, losing $70 million in Stakehound in May 2021 and $54 million in the BadgerDAO hack in December.

"Speculations have escalated over the last month that Celsius has been exposed to insolvency risks, in particular following the UST collapse," Lunde added.

Further, US inflation which has reached to a fresh 40-year high of 8.6% in May - added to the vulnerability in crypto markets, especially in Bitcoin. Markets are expecting an aggressive rate hike from US Fed in its policy announcement later today.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services earlier today said, "More than the quantum of the rate hike (50 or 75 bp) it would be the message from the Fed in today's policy announcement that would determine the market direction. The market is prepared for a 75bp rate hike and, therefore, that decision, if it comes, is unlikely to rattle markets."

In its research note dated June 14, the Arcane analyst said Most of the crypto market is eyeballing the potential insolvency of Celsius as the key driver of the poor market. While it’s true that the Celsius situation contributes to exaggerating the sell-off, poor U.S. markets seem to be the key driver still.

Lunde said, "Two weeks ago, we mentioned the declining correlations in the market driven by the recovery in the U.S. equity markets while BTC remained mostly flat. We pointed towards June 10th and June 15th as important macro dates in order to assess whether the market structure was changing. Amid the inflation surprise, we see that BTC’s correlation to equities has again seen a sharp increase."

Further, Lunde added, "The market is now gearing up for a new FOMC meeting, and the higher-than-expected inflation immediately led to a reaction in U.S. treasuries, with the 2-year T-note soaring above 3%, leading Goldman Sachs to revise their FED forecast to include 75bps hikes in June and July."

BTC followed U.S. markets closely on Friday and, in extension, also during this weekend. However, as prices plummeted, new ghosts emerged, and the dangers of impactful insolvencies have contributed to further drag on the crypto market, Lunde highlighted adding, "investors should be braced for volatility and sticky correlations at least in the coming days."


Know your inner investor Do you have the nerves of steel or do you get insomniac over your investments? Let’s define your investment approach.
Take the test
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less

Recommended For You

Trending Stocks

Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout