Bitcoin Falls to the Lowest Level since Dec 2020
Bitcoin has fallen to its lowest level for a year and a half, trading around $25,344 at the time of writing, according to data from CoinGecko.
Prior to that, the cryptocurrency had fallen even further to $24,903.49 - levels not seen since December 2020.
The dip in the value of Bitcoin shows a loss of more than 62.9% since its all-time high set last November at $69,044.77.
“Crypto markets are in extreme fear mode with the only recent comparable period of extended low sentiment stretching back to March 2020. Certainly, the failure of the Terraform Labs UST stablecoin and the subsequent collapse of the linked Terra LUNA coin sent shockwaves through the entire ecosystem," Bradley Duke, Co-CEO at crypto ETP-provider ETC Group, said.
The overall estimated current market value of the crypto market is around $1.07 trillion, following a loss of $2 trillion eight months ago.
The crypto market is likely to remain bearish as investors fear that the Federal Reserve (Fed) will be more aggressive with its monetary policy, aggravating the blow from last month when the Fed raised interest rates. Investors worry that the central bank will raise its rates sharply to fight inflation - which is at its highest in 40 years.
The fall of bitcoin has also affected other digital currencies. Ethereum, the second cryptocurrency by market value, has fallen to around $1,320, far from the $4,878.26 level from November. The digital currency has lost 72.6% of its value since November 10.
Meanwhile, two up-and-coming decentralized finance ecosystem tokens Cardano and Solana were down 9.4% and 12.7% respectively in the last 24 hours. Additionally, the price of meme coins Dogecoin and Shiba Inu was down 10.6% and 6.5% respectively.
"Not least from the 80,000 BTC (~$2.3bn) that Terra backers the Luna Foundation Guard were forced to sell at a considerable loss. Bitcoin has remained relatively resilient to such shocks, despite markets leaning bearish for the last six months. But dropping through a key level at $28,000 means the next major support is at $20,000," Duke said.
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