Sudden fall in the crypto market sends bitcoin below $22,000

Bitcoin on Friday fell to its lowest level in more than three weeks, falling below $22,000 amid a sudden crypto sell-off in early European trade.

Bitcoin plunged from $22,738 to below $21,12.34 at 2:30 a.m. ET, according to CoinDesk data. Earlier in the morning, the cryptocurrency fluctuated between $21,500 and $22,000.

It comes shortly after the world’s largest digital coin breached the $25,000 level for the first time since June following a rally in US stocks.

Ether fell from $1,808 to $1,728 at the same time, before staging a subdued rebound. It had fallen again, falling further to $1,683.90 by 4pm ET.

A specific cause of a fall at that time, which also sent Binance coin, Cardano and Solana falling, was not immediately clear.

“It doesn’t show the pattern of a flash crash, as assets don’t immediately rebound sharply, but sink even lower in the hours that followed,” said Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown. “It seems likely that it was the result of a large sales transaction, in the absence of other more external factors.”

Streeter said Cardano appeared to take the first plunge, followed by Bitcoin and Ether and then smaller coins like Dogecoin.

“This fresh cold has sunk amid fears that the market is headed for a crypto winter,” she added. “Although Bitcoin at $21,800 is still a long way from the June lows below $19,000, volatility is once again playing havoc with the market.”

The digital coins can also follow stocks lower.

“US stock markets have retreated since Wednesday’s release of the July Fed meeting minutes, the most important factor being that the Fed is unlikely to be done with rate hikes until inflation is tamed across the board, with no guidance on future rate hikes either,” Simon said. Peters, crypto market analyst at eToro, to CNBC.

“With the tight correlation between US stocks and crypto in recent months, I suspect this has filtered through to the crypto markets, which is why we are seeing the sell-off. The trend may also have been fueled by the liquidation of long positions in bitcoin perpetual futures markets. . “

Citing Coinglass data, Peters said Friday had been the biggest liquidation of long futures positions since June 18, also the date bitcoin hit its lowest price of the year around $17,500.

Bitcoin and ether ended Thursday in the red, but ether is up more than 100% since mid-June as investors brace for a massive upgrade to the ethereum network.