Bitcoin Nears $22K, ETH Falls 20% With $1 Billion Liquidated in Selloff; What Do Analysts Say and When Might Bullishness Return?

Bitcoin tumbled to lows of $22,600 on Monday, hitting its lowest level since December 2020, as investors dumped crypto amid a widespread sell-off in risk assets.

Meanwhile, crypto lending company platform Celsius has paused withdrawals for its customers, sparking fears of contagion into the broader market. The world’s largest cryptocurrency, bitcoin, traded around $23,090 for a loss of 18%. Ethereum suffered even more losses, down 20.53% while trading at $1215.

The cryptocurrency market capitalization fell below $1 trillion on Monday for the first time since February 2021, recording $945 billion according to data from CoinMarketCap at press time. Dogecoin was down 20.36% while Polygon (MATIC), Apecoin (APE), and STEPN (GMT) recorded losses of 21.79%, 24.40%, and 23.35%, respectively.

Celsius rivals Aave, Curve DAO token, and Lido DAO all dropped 21.3%, 25.20%, and 32%, respectively, as tokens tied to lending and borrowing protocols underperformed.

Macro factors are adding to the bearish sentiment in the crypto markets with larger-than-expected inflation statistics, and the U.S. Federal Reserve is expected to hike interest rates this week to control rising prices.

The Cause of the Declines and What Analysts Say

In the past week, U.S. stocks sold off heavily, with the Nasdaq dropping sharply into a bear market. Bitcoin and other cryptocurrencies have tended to correlate with stocks and other risk assets. When stocks drop, crypto plunges as well.

“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.” Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, told CNBC.

Ayyar cited that in previous bear markets, bitcoin fell around 80% from its last record high. Currently, it is down around 63% from its last all-time high of $69,000, which it hit in November 2021.

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

According to veteran trader Peter Brandt, ETH/USD has met its first downside target (at $1,268). The second target level given by the veteran trader stands at $667.

According to Crypto analyst, Ali Martinez, “roughly 30,000 bitcoins were withdrawn from exchanges in the past 24 hours, while addresses with 1,000 to 10,000 BTC added 40,000 BTC to their holdings.” Meanwhile, prices dropped by nearly 18% in the same period’’.

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