Crypto Market Crash Intensifies After $300 Billion Sell-Off—How Low Can Bitcoin Prices Go?

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Bitcoin plunged to a three-month low on Monday morning, extending a slide that began when the Federal Reserve launched a massive sell-off last week by warning that it could move more quickly than previously expected to reverse policy aimed at boosting the economy during The epidemic, experts predict that the latest flaw in the cryptocurrency could persist for weeks if the central bank’s hawkish stance becomes more aggressive.

key facts

Bitcoin plunged as much as 5% to $39,692 by 9:45 a.m. ET, according to crypto data site CoinGecko, taking its losses to more than 12% since the Federal Reserve warned Wednesday that it could move more aggressively. To remove the pandemic era stimulus as it looks to combat high inflation levels.

In an email over the weekend, analyst Yuya Hasegawa of cryptocurrency broker Bitbank warned that he expects the world’s largest cryptocurrency to continue to slide until the broader market, which has similarly struggled since the Federal Reserve’s announcement on Wednesday, absorbs the possibility of an interest rate hike by the Fed. Around the month of March. .

Although Hasegawa said Bitcoin could drop to $40,000 in the near term, the analyst cautioned that the government’s CPI report due on Wednesday could further weaken prices if it shows inflation has risen more than expected, justifying it. The Fed’s decision to ease stimulus and raise prices.

In a note on Monday, Marcus Soterio, an analyst at UK digital asset broker GlobalBlock, said he expects Bitcoin to hover around $40,000 even if Wednesday’s CPI report showed inflation rose more quickly than expected last month, assuming Recent sales. It is likely to be priced in a lot of negative forecasts.

On Thursday, crypto billionaire Mike Novogratz, CEO of financial services firm Galaxy Digital, told CNBC that the sell-off could push bitcoin down another 8% from current prices to as low as $38,000 — a level not seen since early August.

“I’m not nervous in the medium term, but we’re going to have a lot of volatility in the next few weeks,” a strong bitcoin bull told CNBC, before pointing to booming institutional adoption as a bullish indicator of the emerging space. .

the shadow

Bitcoin was far from alone in its plunge on Monday morning. Over the past 24 hours, the value of Ether, Binance, and Sol has fallen by as much as 5% — bringing losses to nearly 20% per lot over the past week.

What to watch

Although Fed officials said last month that they expected only three rate hikes this year, Jan Hatzius, chief economist at Goldman Sachs, said on Monday that he expects the central bank already to raise rates four times this year given “more sense.” more urgently” than he had previously expected. In a Federal Reserve announcement on Wednesday.

critical quote

“Bitcoin remains vulnerable to breaching the $40,000 level, and could take a hit from the ether if it breaks above the $3,000 level,” Ed Moya, chief market analyst at Oanda, wrote in an email on Friday. Ether recorded its price at around $2,985 on Monday. “The long-term outlook remains bullish for both the biggest cryptocurrencies, but the short-term looks ugly.” Meanwhile, Novogratz wasn’t alone among billionaire crypto investors cheering on bitcoin during the recent sell-off: “Lots. Money. Patiently waiting for bitcoin.” [buy the dip] On bitcoin, Barry Silbert, founder and CEO of crypto firm Digital Currency Group, wrote on Twitter on Saturday afternoon.

against

Despite bouts of extreme volatility in bitcoin, Zach Bundle, co-head of global forex exchange at Goldman Sachs, wrote in a note to clients last week that the cryptocurrency could surpass $100,000 in the next five years. Bandel said he expects bitcoin’s share of the cryptocurrency market, currently around 41%, to “likely rise over time as a byproduct of broader adoption of digital assets” and that cryptocurrency will increasingly compete with gold as a hedge against inflation.

Huge number

$1.9 trillion. That’s the value of all the world’s cryptocurrencies on Monday morning, down more than $300 billion, or 14%, since Wednesday and more than $1 trillion from an all-time high of $3 trillion in November.

Amazing fact

Over the past five years, bitcoin prices have risen nearly 4,300%. However, the cryptocurrency is down nearly 40% from a record $69,000 in November.

in-depth reading

Major cryptocurrencies – including Bitcoin and Ethereum – are plummeting after looming Fed minutes signal interest rate hikes. (Forbes)

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