Bitcoin plummeted below $20,000 for the first time since December 2020. Ether dropped to $1,000 and fell almost 11% to $975.24, its lowest level since January 2021. The two bellwethers of crypto are both roughly 70% lower than all-time highs set late last year.
Altcoins fared no better, as investor sentiment turned sour after Bitcoin’s tumble. Popular altcoins, like Cardano, Solana, Dogecoin and Polkadot, all recorded dips between 7% and 10%.
A bad news cycle featuring higher interest rates and monetary tightening has heavily stressed the crypto market.
Stablecoins, assets meant to be pegged to the value of major fiat currencies, like the US dollar, have also performed badly. The top four stablecoins saw exchange net outflows last week that were almost five times larger than the previous week.
The total market capitalization of cryptocurrencies was around $880 billion over the weekend, marking a staggering fall from roughly $3 trillion in November.
What does this mean for me?
Global economic uncertainty, combined with spectacular failures in the crypto market, have caused prices to fall at a rate that has shocked many market watchers.
Investors are taking defensive positions and moving their money to assets with more defined pathways to profitability. However, historical data shows that even at the $20,000 level, Bitcoin may find support around that mark, as previous selloffs show where the asset usually stops falling. Some analysts are saying today’s price of $20,000 could be the new $5,000 in 2018-19 or $300 in 2014-15.