Bitcoin dives to 18-month low after DeFi lender Celsius blows up
The world’s largest digital token tumbled as much as 15% to $23,336 – its lowest since December 2020. Other cryptocurrencies also declined as a broader sell-off continued. The MVIS CryptoCompare Digital Assets 100 Index, which measures 100 of the top tokens, dropped as much as 15%. And the total market value, which topped $3 trillion in November, was $1.02 trillion as of 9:48 a.m. New York time on Monday, according to CoinGecko.
“The fundamentals to support stabilization and recovery just aren’t there,” said Steven McClurg, co-founder and CIO at crypto fund manager Valkyrie Investments. “Things can and likely will get worse before they get better.”
The selloff comes as traders are boosting bets for a more aggressive pace of Federal Reserve tightening after data Friday showed US inflation jumped to a fresh 40-year high in May. Cryptocurrencies, which have struggled amid the Fed‘s policy in recent months, have been hit particularly hard. The collapse of the Terra/Luna ecosystem last month, and lender Celsius pausing withdrawals Monday morning Asia time, have further eroded confidence.
“If you do get long, perhaps think about doing so with either a long call spread or short put spread to limit risk” on Bitcoin futures, said Rick Bensignor, president of Bensignor Investment Strategies and a former strategist at Morgan Stanley. “If this dives, there’s no reliable support nearby.”
Crypto long liquidations hit about $437 million on Monday, according to CoinGlass, the most since May 11. This is the fourth day the tally has been above $250 million.
Altcoins were suffering more. Ether declined as much as 20% to its lowest level since January 2021. Avalanche dropped as much as 20%, Solana up to 19% and Dogecoin as much as 20%.
