Bitcoin and Crypto Market Experienced Massive Decline: Why?
The cryptocurrency market has wiped out around $130 billion in value over the past day. The major digital token continues its multi-day sell-off as well. More specifically, Bitcoin hit a new multi-month low on Jan. 24.
According to market data, BTC/USD fell to $32,967 on Bitstamp ahead of Wall Street’s opening on Monday.
This level represents the start of a gap in CME futures since July 2021. Bitcoin nearly “fills” into the dollar before reversing upwards to add more than $1,000 within minutes.
Expectations are high for U.S. stocks to start trading due to the market volatility.
Currently, BTC/USD is trading just below $34,000.
The move in the cryptocurrency market has been linked to a sell-off in riskier assets such as tech stocks. Investors brace for tightening monetary policy by the Federal Reserve and higher interest rates.
Meanwhile, investor behavior appears to offset concerns about short-term sellers.
As noted by investor and entrepreneur Alistair Milne, the percentage of Bitcoin supply that has remained stable for a year or more has reached levels not seen in previous capitulation events.
Even after breaking out of the 2018 bear market bottom, the resolve of long-term investors is now evident when Bitcoin hits $3,100 after falling more than 80%.
Things looked even bleaker for major altcoins on the day, as ether fell nearly 11% to near $2,000.
The largest altcoin by market cap wasn’t the only one to drop sharply, with the top 10 led by Solana (SOL) down nearly 18% at the moment.
For popular trader and analyst Pentoshi, bid levels to watch are now below $2,000 support — more than 60% below recent all-time highs.