Bitcoin fell below $21,000 in Asia on Tuesday before recovering slightly, continuing its downward trend as investors sold risky assets.
According to Coinbase data, the world's largest cryptocurrency has dropped around 10% in the last 24 hours, while ethereum has dropped more than 6%.
At 2.53 a.m. ET, Bitcoin was trading at $22,594.50.
"Everything is on fire right now, be it the equities, be it the crypto assets or anything," Nirmal Ranga, head of trading and technical analysis at cryptocurrency exchange ZebPay, said.
"What you’re seeing in the market is … fear, uncertainty and doubt. Technically, markets look oversold and there has to be some floor that we’re going to hit in bitcoin in the coming future,” he told CNBC’s “Street Signs Asia ."
On Monday, crypto assets took a beating as trading platforms such as Celsius and Binance halted withdrawals and some businesses cut staff.
Because of "extreme market conditions," Celsius said withdrawals, swaps, and transfers between accounts would be halted. The move was intended to "stabilize liquidity and operations."
In a memo, the company stated, "we are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations."
Meanwhile, Binance, the world's largest cryptocurrency exchange, halted bitcoin withdrawals for more than three hours due to a "stuck transaction" that caused a backlog.
According to CoinMarketCap data, the market capitalization of cryptocurrencies fell below $1 trillion for the first time since February 2021 on Monday. In recent days, the market has lost around $200 billion.
The crypto sell-off comes as investors shied away from risky assets amid fears of a global recession as major central banks around the world raise interest rates to combat inflation.
According to CNBC's Steve Liesman, policymakers at the US Federal Reserve are now considering a 75-basis-point rate hike later this week. This is more than the 50-basis-point increase that many traders had anticipated. The story was first reported by the Wall Street Journal.
Rising interest rates make future earnings from growth assets appear less appealing.
From its all-time high in November 2021, bitcoin has dropped nearly 70%.
By fLEXI tEAM