Bitcoin and Ether have fallen sharply to multi-month lows as concerns mount over a potential US recession. movement follows weak economic data that sent financial markets into a tailspin and sparked a rush to safe-haven assets.
The crypto market surged earlier this year after the US Securities and Exchange Commission approved an exchange-traded fund to track the spot price of bitcoin and ether. More recently, however, bitcoin has fallen in line with other assets, including global stocks, as investors fear a US recession is looming.
Risk investments take a hit
“It’s a big reminder that bitcoin and crypto in general are risky assets and at the pointy end of the risk spectrum,” said Tony Sycamore, market analyst at IG.
Bitcoin fell 13 percent from Sunday’s close to $51,560, on track for its biggest one-day drop since November 2022 and its lowest since February. Ether slid 17 percent to its lowest since mid-January at $2,277.
Sycamore noted that Bitcoin was testing the trend channel support at $54,000/$53,000 and needed to stay there to “avoid further capitulation towards $48,000.”
Crypto-related stocks take a hit
Shares in crypto-related U.S. stocks listed in Frankfurt fell heavily in early trading on Monday, with Coinbase, Riot Platforms and Marathon Digital down 18 percent, 17.7 percent and 20 percent, respectively.
The drop highlights the impact of recessionary concerns on the broader market, including crypto assets. As investors seek safe haven assets, riskier assets like bitcoin and ether are taking a hit. The question remains whether this downturn will be short-lived or a signal of a more sustained trend.
Ultimately, it’s clear that bitcoin and ether are not immune to market volatility. When weighing the risks and rewards of these assets, investors must also consider the broader economic landscape and its potential impact on their investments.
Key takeaways
• Bitcoin and ether fell to multi-month lows as recession worries grip markets.
• The crypto market was high earlier this year but has fallen in line with other assets on fears of a US recession.
• Risky assets like bitcoin and crypto are taking a hit as investors seek safe haven assets.
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