Bitcoin drops below $21,000 briefly as crypto sell-off continues

Bitcoin briefly fell below $21,000 on Tuesday in Asia before bouncing back slightly, continuing its plunge as investors sold off risk assets.

The world’s largest cryptocurrency fell around 10% in the past 24 hours, while ethereum tumbled more than 6% over the same period, according to Coinbase data.

Bitcoin was last trading at $22,594.50 at 2.53 a.m. ET.

“Everything is on fire right now, be it the equities, be it the crypto assets or anything,” said Nirmal Ranga, head of trading and technical analysis at crypto exchange ZebPay.

“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.”

Crypto assets were hammered on Monday as trading platforms such as Celsius and Binance stopped withdrawals, and some companies cut jobs.

Celsius said withdrawals, swaps, and transfers between accounts would be halted because of “extreme market conditions” and that the move was meant to “stabilize liquidity and operations.”

“We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations,” the company said in a memo.

Meanwhile, Binance, the world’s largest crypto exchange, halted bitcoin withdrawals for over three hours “due to a stuck transaction causing a backlog.”

The market capitalization for cryptocurrencies slipped below $1 trillion on Monday for the first time since February 2021, data from CoinMarketCap showed. Around $200 billion has been wiped off the market in recent days.

The crypto sell-off comes as investors broadly shunned risky assets against a backdrop of fears over a potential global recession as major central banks around the world hike interest rates to tame inflation.

Policymakers at the U.S. Federal Reserve are now contemplating the idea of a 75-basis-point rate increase later this week, according to CNBC’s Steve Liesman. That’s bigger than the 50-basis-point hike many traders had come to expect. The Wall Street Journal reported the story first.

Rising rates tend to make future earnings for growth assets look less attractive.

Bitcoin has fallen nearly 70% from its all-time high in November 2021.