Bitcoin sinks to six-month low amid huge crypto selloff; ETH, BNB, ADA, SOL, other altcoins also drop

Bitcoin plunged nearly 22 per cent in the past seven days while altcoins also registered a steep decline. Ethereum dropped over 31 per cent, Binance Coin declined 28 per cent, Cardano sank 35 per cent, XRP too dipped nearly 29 per cent while Solana witnessed the biggest fall of 40 per cent among the top 10 coins.

The virtual currency has been struggling to regain its previous high of around $68,000 in November last year. (Image: pexels)

Bitcoin declined to its lowest level in six months on Monday as the crypto sell-off continued with investors moving away from risky bets. Bitcoin, the biggest cryptocurrency, which was trading at 33,863 — lowest since July 24, 2021 — had plunged nearly 22 per cent in the past seven days while altcoins also registered a steep decline. Ethereum dropped over 31 per cent, Binance Coin declined 28 per cent, Cardano sank 35 per cent, XRP too dipped nearly 29 per cent while Solana witnessed the biggest fall of 40 per cent among the top 10 coins, showed CoinMarketCap, at the time of filing this report.

Experts opined that recent policy announcements by the US Federal Reserve have had an impact on financial markets across the world and risk assets are being sold off as a result of the anticipated macro-economic downturn. Moreover, Russia and China also announced their actions to curb crypto in their domestic markets which led to a big sell-off in the Asian markets.

“The crypto dip is largely due to flight to safety and less speculative assets. This, in turn, is due to a move towards the reduction in liquidity as interest rates are poised to go up globally in 2022. Meanwhile, the dip in tech stocks can be attributed to the rise of interest in undervalued stocks, as well as stocks related to specific sectors which are expected to witness post-pandemic growth opportunities,” Raja Gopalakrishnan, Executive Vice President – Global Real Time Payments, FIS told Financial Express Online. 

The market cap for Bitcoin had also dropped to $642 billion for bitcoin, which had around 40 per cent share in the overall crypto market cap of $1.5 trillion. “The decline in crypto prices is a fall out of the strong concerns of the US Federal Reserve increasing interest rates draining out liquidity. In Addition, the ongoing property developer market situation in China related to Ever Grande prompting China central bank to reduce interest rates to back the domestic market is a big deal as China previously said that they wouldn’t do anything of that sort, raising fears of global uncertainty” Vishnu Tadepalli, Member of Blockchain and Crypto Assets Council and CEO at crypto-thematic basket investment platform Crypto Smartlife told Financial Express Online.

Also read: Budget 2022 expectations: Need more regulatory focus around cryptocurrency, NFTs, says survey

Bitcoin currently seems to be headed towards its all-time low price of $29,807 as of July 20, 2021. The virtual currency has been struggling to regain its previous high of around $68,000 in November last year. China’s ban, Elon Musk’s tweets about environmental issues surrounding Bitcoin mining, and altcoins adoption have challenged Bitcoin to maintain its hegemony even as it is still the biggest crypto in the world, by all means.

“S&P 500 has been down over 7 per cent since the start of 2022, bitcoin down 17 per cent while gold was unchanged. The year-to-date correlation between bitcoin and the high-growth benchmark ARK Innovation ETF (ARKK) was still at 60 per cent, against 14 per cent for gold, prompting us to classify bitcoin and altcoins as risk assets rather than safe-havens,” Shivam Thakral, Member, Blockchain and Crypto Assets Council and CEO, BuyUcoin told Financial Express Online.

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