Bitcoin price plunged to the lowest in about 18 months in Asia trading Monday as the impact of Friday’s shock US inflation data continued to reverberate through global risk assets.
Bitcoin price plunged to the lowest in about 18 months in Asia trading Monday as the impact of Friday’s shock US inflation data continued to reverberate through global risk assets.
The world’s largest digital token tumbled as much as 12% to $23,981 — its lowest since December 2020. Other cryptocurrencies also declined as a broader sell-off continued. The MVIS CryptoCompare Digital Assets 100 Index, which measures 100 of the top tokens, dropped as much as 14%. And the total crypto market cap, which topped $3 trillion in November, was $1.02 trillion as of 5 a.m. New York time on Monday, according to CoinGecko.
“Cryptos remain at the mercy of the Fed and stuck in a merry dance with the Nasdaq and other risk assets,” said Antoni Trenchev, co-founder and managing partner of crypto lender Nexo. “We’re hearing Bitcoin forecasts in the mid-teen and single-digit thousands which tells you the type of macro environment crypto is facing for the first time — and the levels of fear.”
Traders are boosting bets for a more aggressive pace of Federal Reserve tightening after data Friday showed US inflation jumped to a fresh 40-year high in May. Cryptocurrencies, which have struggled amid the Fed’s policy in recent months, have been hit particularly hard. The collapse of the Terra/Luna ecosystem last month, and lender Celsius pausing withdrawals Monday morning Asia time, have further eroded confidence in the space.
“If you do get long, perhaps think about doing so with either a long call spread or short put spread to limit risk” on Bitcoin futures, said Rick Bensignor, president of Bensignor Investment Strategies and a former strategist at Morgan Stanley. “If this dives, there’s no reliable support nearby.”
Crypto long liquidations hit about $437 million on Monday, according to CoinGlass, the most since May 11. This is the fourth day the tally has been above $250 million.
Altcoins were suffering more than Bitcoin. Ether declined as much as 20% to its lowest level since January 2021. Avalanche dropped as much as 20%, Solana up to 19% and Dogecoin as much as 20%.
“If Ethereum continues to bleed toward $1,200 (the 200-week moving average) the outlook for other altcoins becomes even bleaker,” Trenchev said.
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