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Bitcoin and ether plummeted to multi-month lows on Monday, driven by fears of a potential U.S. recession following weak economic data. This anxiety has prompted investors to flock to safe-haven assets, causing a broad sell-off in financial markets.
Earlier this year, the U.S. Securities and Exchange Commission approved an exchange-traded fund to track the spot price of bitcoin and ether, giving a boost to crypto markets. However, recent developments have seen bitcoin decline alongside global equities as recession fears intensify and geopolitical tensions rise. Bitcoin is now nearly 20% off its March 2024 high.
Tony Sycamore, market analyst at IG, commented, “It’s a big reminder that Bitcoin and crypto, in general, are risk assets and sit at the pointy end of the risk spectrum.”
Bitcoin dropped to $53,091, its lowest since late February, and currently trades at $54,112. Ether, meanwhile, hit its weakest point since mid-January, falling 16% to $2,300.
Sycamore noted that bitcoin is testing trend channel support in the $54,000/$53,000 area, and needs to hold this level to “prevent further capitulation towards $48,000
