Key Insights
- Bitcoin fell below $40,000 on Monday for the first time in 2022, dragging the crypto market down.
- Bitcoin has declined 14% since its recent high of $46,000 last week, as investors sell following the long-awaited spot BTC ETF approvals.
- Other major cryptocurrencies like Ether, Solana, Ripple’s XRP, and Uniswap’s token saw similar declines ranging from 4-7% on Monday.
LONDON – Bitcoin slumped below $40,000 for the first time this year on Monday, pulling other major cryptocurrencies down with it, after a remarkable rally in digital assets came to a screeching halt.
The price of bitcoin fell as much as 5% to $39,573, marking a whopping 14% decline since its recent high of $46,000 hit just last week. The drop below the key psychological $40,000 level dragged bitcoin to its lowest level since early December 2021.
Ether, the second-largest cryptocurrency by market value, dropped over 5% to $2,333. Solana, Ripple and Uniswap’s tokens saw similar declines of between 4-7%.
Will Bitcoin Crash Accelerate?
Bitcoin has been in correction territory since enthusiasm surrounding the launch of the first U.S. bitcoin futures ETFs last week peaked. Investors who had bet big on the approval of spot bitcoin ETFs went on a selling spree after the news, in a classic “sell the news” move.
While crypto bulls remain unfazed by the latest bout of volatility, pointing to the coin’s long-term uptrend, technical analysts are warning there may be more pain ahead. Katie Stockton of Fairlead Strategies told CNBC bitcoin could fall to $36,000 in the short term.
The declining prices spread panic across the crypto complex on Monday. The overall crypto market cap dropped below $2 trillion again, after trading above that level for most of last week.
Still, bitcoin is up around 5% since the beginning of 2022, outperforming traditional assets like stocks which have struggled amid concerns over tighter Fed policy and geopolitical tensions. Ether has gained over 20% year-to-date.
The recent crypto boom took off last year amid increasing institutional adoption. While major Wall Street banks hopped onto the bandwagon, speculators were left questioning how much more room bitcoin, infamous for its volatility, has left to run. For now, the bears appear to be back in control.
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