(Reuters) – Bitcoin and ether plunged to multi-month lows on Monday as concerns about a possible U.S. recession following weak data gripped financial markets and triggered a rush into safe-haven assets.
Cryptocurrency markets have received 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.
More recently, however, bitcoin has fallen along with other assets, including global stocks, in a widespread sell-off as investors fear a US recession could be on the horizon, with growing geopolitical concerns weighing in. It has lost more than a third of its value since hitting an all-time high in March.
“It's a great reminder that Bitcoin and cryptocurrencies in general are risk assets and sit at the higher end of the risk spectrum,” said Tony Sycamore, market analyst at IG.
Ethereum's price fell 13% from its Sunday close at $51,560, heading for its biggest one-day drop since November 2022 and its lowest level since February. Ether fell 17% to its lowest level since mid-January at $2,277.
Sycamore said Bitcoin was testing trend channel support in the $54,000/$53,000 area and needed to hold there to “avoid further capitulation towards $48,000.”
Shares of U.S. cryptocurrency-related stocks listed in Frankfurt fell sharply in early trading on Monday, with Coinbase (NASDAQ:) down more than 18%, while those of miners Riot Platforms (NASDAQ:) and Marathon Digital (NASDAQ:) dropped 17.7% and 20%, respectively.
