Bitcoin (BTC) has fallen to its lowest level in 2022, down more than 50 per cent from its all-time price high.
The cryptocurrency crashed below $33,000 on Monday morning for the first time since July 2021, according to CoinMarketCap’s price index, marking the latest in a severe capitulation from its price peak in November.
The price drop comes amid a broader crypto market collapse, which has seen nearly $300 billion wiped from the value of cryptocurrencies over the last four days.
Ethereum (ETH) mirrored bitcoin’s demise, matching its 13 per cent price fall since last week, while some other leading cryptocurrencies fared even worse.
Solana (SOL) fell by more than 16 per cent over the last week, while Terra (LUNA) dropped by more than 25 per cent.
“The concern now for cryptoasset investors is when the slide will end,” said Simon Peters, a crypto market analyst at the online trading platform eToro.
“The market is caught in the wider adversity of investment markets that are battling to decide where confortable levels are in the wake of interest rate hikes designed to quell soaring inflation around the Western world.”
One measure of market sentiment suggests bitcoin traders and investors are experiencing “extreme fear” as a result of the tumbling prices.
The Crypto Fear and Greed Index, which analyses exchange data and online trends to assess overall market sentiment, is currently at ‘11’, marking its lowest point since last year.
Bitcoin Fear and Greed Index is 11 — Extreme Fear
Current price: $34,041 pic.twitter.com/PQK3x6YMok
— Bitcoin Fear and Greed Index (@BitcoinFear) May 9, 2022
Bitcoin’s demise marks one of its worst price slumps in recent years, with analysts warning it could form part of a longer-term bear market if it does not bottom out soon.
Market watchers have pointed to $30,000 as a key level of support, having previously tested and recovered from that point several times in 2021 before going on its record-breaking run.
A fall of just 10 per cent would take bitcoin back to that level.