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Bitcoin drops 14%, falling underneath $24,000 as $200 billion wiped off crypto showcase over the weekend

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 Bitcoin tumbled below $24,000 on Monday, hitting its lowest level since December 2020, as investors dump crypto amid a broader sell-off in risk assets.


Meanwhile, a crypto lending company called Celsius has paused withdrawals for its customers, sparking fears of contagion into the broader market.


The world’s largest cryptocurrency bitcoin dropped below the $24,000 mark, according to CoinDesk data, and traded around $23,575 at 7:45 a.m. on Wall Street.


Over the weekend and into Monday morning, more than $200 billion had been wiped off the entire cryptocurrency market. The cryptocurrency market capitalization fell below $1 trillion on Monday for the first time since February 2021, according to data from CoinMarketCap.


Macro factors are contributing to the bearishness in the crypto markets, with rampant inflation continuing and the U.S. Federal Reserve expected to hike interest rates this week to control rising prices.


Last week, U.S. indices sold off heavily, with the tech-heavy Nasdaq dropping sharply. Bitcoin and other cryptocurrencies have tended to correlate with stocks and other risk assets. When these indices fall, crypto drops as well.



“Since Nov 2021, sentiment has changed drastically given the Fed rate hikes and inflation management. We’re also potentially looking at a recession given the FED may need to finally tackle the demand side to manage inflation,” Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, told CNBC.


“All this points to the market not completely having bottomed and unless the Fed is able to take a breather, we’re probably not going to see bullishness return.”


Ayyar noted that in previous bear markets, bitcoin had dropped around 80% from its last record high. Currently, it is down around 63% from its last all-time high which it hit in November.


“We could see much lower bitcoin prices over the next month or two,” Ayyar said.

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