Bitcoin slumped to below $23,000, while the big crypto lender Celsius halted withdrawal. For the first time since early 2021, the overall crypto market capitalization fell below $1 trillion, amid traditional markets also came under severe pressure.
On Monday, Bitcoin suffered its largest price drop in 2022 as signs emerged that the steep correction in crypto markets is hurting big industry players and putting extreme stress on digital-asset projects.
As of press time, bitcoin was changing hands around $23,200, down 16% over the past 24 hours. Ether (ETH), the native token of the Ethereum blockchain, slumped 18% to $1,222.
The day was full of sweeping developments and sudden announcements disturbing crypto markets.
The overall crypto market capitalization fell below $1 trillion for the first time since early 2021, with big losses in tokens, including Solana and Dogecoin. Crypto-related stocks plunged, led by MicroStrategy (MSTR).
Also, Binance temporarily paused Bitcoin withdrawals reportedly due to technical issues. Crypto.com and the crypto lender BlockFi announced job cuts. Tron’s USDD stablecoin de-pegged off the US dollar.
“Sentiment for cryptos is terrible,” wrote Edward Moya, senior market analyst at the foreign-exchange broker Oanda, in an emailed briefing. “Bitcoin is attempting to form a base, but if price action falls below the $20,000 level it could get even uglier.”
The pain in crypto mounted as traditional markets also came under severe pressure. The Standard & Poor’s 500 Index tumbled 4% to a new low for the year. The biggest driver appeared to be renewed investor fears the US Federal Reserve will have little choice but to tighten monetary policy aggressively to tamp down inflation, which is running at its hottest in four decades.
Meanwhile, the next two-day Fed monetary policy meeting starts Tuesday, culminating Wednesday with a statement and press conference hosted by Chair Jerome Powell.