Bitcoin and Ether Plunge to Multi-Month Lows as Recession Worries Grip Markets

Crypto markets have gotten a boost this year after the U.S. Securities and Exchange Commission approved an exchange-traded fund to track the spot price of bitcoin and ether.

Bitcoin and ether prices fell sharply on Monday as fears of a possible U.S. recession gripped financial markets and led to a rush into safe-haven assets following a batch of soft data.

Crypto markets had enjoyed a boost earlier this year after the U.S. Securities and Exchange Commission cleared an exchange-traded fund to track the spot price of bitcoin and ether.

But bitcoin has fallen recently along with other assets, including global equities, in a broader selloff as investors fret over the possibility of a U.S. recession amid rising geopolitical concerns. The world’s largest cryptocurrency has now lost more than a third of its value since hitting a record high in March.

“It’s a big reminder that bitcoin and crypto in general are risk assets and sit at the pointy end of the risk spectrum,” said Tony Sycamore, market analyst at IG.

Bitcoin fell 13% from Sunday’s close to $51,560, on course for its biggest one-day drop since November 2022 and its lowest since February. Ether slid 17% to $2,277, its lowest since mid-January.

Sycamore added that bitcoin was testing trend channel support at the $54,000-$53,000 zone and needed to hold there to “prevent further capitulation towards $48,000.”

Shares in U.S. crypto-related stocks, listed in Frankfurt, fell sharply in early trading on Monday. Coinbase (NASDAQ:COIN) dropped more than 18%, while those in miners Riot Platforms (NASDAQ:RIOT) and Marathon Digital (NASDAQ:MARA) fell 17.7% and 20%, respectively.

(Reporting by Lisa Mattackal in Bengaluru; Editing by Shailesh Kuber)

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