LONDON/WASHINGTON- Bitcoin steadied on Tuesday after earlier hitting a new 18-month low, as major crypto lender Celsius Network’s freezing of withdrawals and the prospect of sharp US interest rate rises shook the volatile asset class.
Bitcoin clawed its way to positive territory after much as 7.3 percent overnight to $20,816, its lowest since Dec. 2020. It was last hovering around $22,470.
The world’s largest cryptocurrency fell 15 percent on Monday, its sharpest one-day drop since March 2020. It has shed about half its value this year and over 20 percent since Friday alone. Since its record high of $69,000 in November, it has slumped nearly 70 percent.
Citing “extreme” market conditions, New Jersey-based Celsius said this week that it had frozen withdrawals and transfers between accounts “to stabilize liquidity and operations while we take steps to preserve and protect assets.”
The move, combined with expectations of sharper US Federal Reserve interest rate hikes after high US inflation data last week, pushed the value of the crypto market under $1 trillion for the first time since January 2021.
Most crypto market-watchers were pessimistic on bitcoin’s immediate prospects.
“With the broader risk sentiment firmly negative the sellers have had it all their own way for a few days,” said Richard Usher at crypto firm BCB Group. “It will take a shift in the overall risk sentiment to turn the price around significantly.”
Bitcoin’s slump is likely to have ramifications for other companies exposed to the crypto market.
