Bitcoin BTC, ethereum and other major cryptocurrencies have suddenly crashed, wiping $400 billion from the combined crypto market since Friday.
The bitcoin price has fallen dramatically toward $30,000 per bitcoin, down 20% from over $40,000 last week. Ethereum and its biggest rivals BNB BNB, solana, cardano and avalanche had fallen even more steeply, each losing between 15% and 20%. Ripple's XRP XRP is also down around 15%.
The brutal bitcoin and crypto price crash was triggered first by the U.S. Federal Reserve sharply hiking interest rates last week, also crashing stock markets, and then exacerbated by the fast-growing algorithmic stablecoin TerraUSD (UST) struggling to maintain its $1 peg as its support cryptocurrency luna leads market lower with a blistering 30% plummet.
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“In highly volatile markets, all asset classes will move in lockstep," Michael Safai, managing partner at crypto trading firm Dexterity Capital, said in emailed comments, pointing to soaring inflation and fears over more Fed monetary tightening worrying investors.
Safai warned that if the bitcoin price crashes under $30,000 fears over "ripple effects" will spread.
"Enthusiasm for what’s being built in crypto hasn’t faded, but if we go further below $30,000, the market will naturally be worried about the ripple effects, such as miners turning their machines off as they move out of profitability. $25,000 isn’t a worst-case scenario here, and the market may be bracing itself for that reality."
Other bitcoin and crypto market watchers have also warned over sell-off "momentum" building.
"Investors exiting positions may be adding some momentum to the protracted sell-off that we’ve witnessed over the past few days," analysts at Bitfinex wrote in an emailed note.
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