Bitcoin fell below $33,000 for the first time since last summer on Monday, extending its peak-to-trough slump to more than 51%.
Bitcoin prices slumped lower Monday, extending its 2022 decline for the world’s biggest cryptocurrency to nearly 30%, as investors plough cash into risk-free assets while finding higher returns in government bonds and the U.S. dollar.
Bitcoin was last seen trading around 5.2% lower on the session at $32,775.00 each, a move that would extend its year-to-date decline to around 30% and testing the lowest levels since July of 2021.
As typically happens, we except this dip to be used by ‘whales’ – who are individuals or entities that hold enough cryptocurrency to have the potential to move currency valuations – as major buying opportunities,.” said Nigel Green, CEO of the financial advisory deVere Group.
“This is because the robust fundamentals of the world’s largest cryptocurrency, including being a digital, borderless, viable, decentralised, tamper-proof, unconfiscatable monetary system remain the same,” he added.
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Still, Bitcoin’s 2022 tumble comes amid a host of issues that the crypto world has yet to face, at least in terms of trading conditions, since it began its meteoric rise in the middle of the last decade.
Surging inflation, aggressive signaling on rate hikes by the Federal Reserve and other central banks, as well as rising bond yields and a resurgent U.S. dollar have all combined to add downward pressure on crypto assets even amidst wider adoption from various governments around the world to either add or compliment bitcoin into its national currencies.
The U.S. dollar index, meanwhile, hit a fresh 20-year high of 104.187 in overnight trading against a basket of six global peer currencies, marking the greenback’s year-to-date gain at around 8.23%. Benchmark 10-year U.S. Treasury note yields were also on the rise, jumping another 4 basis points to a December 2018 peak of 3.19% in overnight dealing.
Bitcoin’s broader adoption by the mainstream investment community has also tightened its correlation with broader tech benchmarks, given its sensitivity to interest rate increases and its connection to growth prospects in blockchain technology and the metaverse.
Bitcoin has fallen more than 51% since reaching an all-time high of $67.802.30 in November of last year, while the Nasdaq Composite index is down around 27.2% from its November 19 peak.
