Bitcoin and Ether Plunge to Multi-Month Lows Amid U.S. Recession Fears and Market Selloff

Bitcoin and Ether Plunge to Multi-Month Lows Amid U.S. Recession Fears and Market Selloff

Bitcoin and Ether tumbled on Monday to their lowest levels in months, as concerns over a potential U.S. recession, spurred by weak economic data, sent financial markets into a tailspin, driving investors toward safe-haven assets.

Earlier this year, the cryptocurrency markets received a boost when the U.S. Securities and Exchange Commission approved an exchange-traded fund (ETF) that tracks the spot prices of Bitcoin and Ether. However, more recently, Bitcoin has declined along with other assets, including global equities, as a broad selloff takes hold. Investors are increasingly worried that a U.S. recession is looming, compounded by rising geopolitical tensions. Since reaching a record high in March, Bitcoin has lost more than a third of its value.

“This serves as a stark reminder that Bitcoin, and cryptocurrencies in general, are risk assets and occupy the most speculative end of the risk spectrum,” said Tony Sycamore, a market analyst at IG.

Bitcoin dropped 13% from its Sunday close, settling at $51,560, on track for its biggest one-day decline since November 2022 and its lowest point since February. Meanwhile, Ether plummeted 17%, reaching $2,277, its lowest since mid-January.

Sycamore noted that Bitcoin was testing support levels within its trend channel at the $54,000 to $53,000 range, and would need to hold there to avoid further declines towards $48,000.

In early Monday trading, shares of U.S. crypto-related stocks listed in Frankfurt took a significant hit. Coinbase (COIN.O) fell over 18%, while shares in mining companies Riot Platforms (RIOT.O) and Marathon Digital (MARA.O) were down 17.7% and 20%, respectively.