Bitcoin and ether plunged to multi-month lows as investors pulled out of riskier assets amid a slump in tech stocks and growing optimism over a U.S. interest rate cut in the near future. Bitcoin fell to $81,668 while ether fell to $2,661, with both down about 12% this week. However, Fed Williams’s outlook has raised investor expectations slightly and BTC is now trading at $83K.
The fall comes as cryptocurrencies have lost $1.2 trillion in market value in six weeks, marking a massive sell-off that has also weighed on Hong Kong’s spot bitcoin ETF, which fell nearly 7%.
While Bitcoin hit a record high above $120,000 in October, the market is still reeling from last month’s biggest single-day drop, which saw $19 billion in positions liquidated, analysts say.
Selling pressure has also hit crypto-related stocks including Strategy, Coinbase and others, with some of them posting their biggest declines this year. JP Morgan has warned that Strategy is at risk of being removed from the MSCI index.
CryptoQuant’s report shows that market conditions are now at their most bearish since the start of the 2023 bull cycle, indicating that the demand wave may have peaked, with market sentiment remaining fragile.
