Bitcoin and Ethereum fell for an eighth day after crypto lender Celsius effectively froze all assets across its platform, further spooking already rattled investors.
Bitcoin plummeted 11% to US$22,493, while its biggest rival by market value, Ethereum, gave up 7.8% to change hands at US$1,220.
Digital currencies followed in the footsteps of wider global markets, which endured a torrid start to the week. Nasdaq, the tech-heavy index that is highly correlated to crypto, plummeted 4.7% yesterday.
Celsius, one of the largest crypto lending firms, yesterday suspended all withdrawals and transfers due to “extreme market conditions.”
Although Naeem Aslam, Avatrade chief market analyst, insisted investors were getting the wrong end of the stick.
“If other players will adopt a similar stance, it could actually bolster the sentiment in the crypto world as the bank run phenomena will be finally put in place," he said.
“Remember, at any time in history when there is serious panic in the market, we have seen financial lawmakers add restrictions on the withdrawal of fiat currency to stop the panic.
“I think the same logic here could also spur some confidence among traders and if a similar move is adopted by other players, we could see a bottom forming for the Bitcoin price fairly soon.”
Bitcoin is trading more than two-thirds below its November high and Ethereum is roughly 75% lower as rising inflation and the economic fallout of the war in Ukraine prompt investors to ditch so-called riskier assets.
In the last week alone, the coins plunged 24% and 30% lower respectively as the ‘crypto winter’ showed little sign of slowing.
Ipek Ozkardeskaya, Swissquote senior analyst, commented: “Cryptocurrencies stand at a vulnerable place right now for two reasons.
“First, they act like risk assets and the fact that they have different fundamentals are not reflected in the market pricing, and the market remains heavily risk-off.
“And two, we start seeing some red flags in some parts of this new market: the terra-luna’s collapse, the Coinbase warnings about ‘unsecured creditors’, and Celsius’ decision to halt activity on accounts are signs that the industry may not be ready for the storm.”
50 of the leading 100 coins were changing hands in positive territory.
Cardano and Polkadot both advanced 5.1%, while Chainlink and Decentraland climbed 9.0% and 7.5% respectively.
Further down the pecking order, Bitcoin SV, Fantom and Gala all surged 18% higher.
Meanwhile, Monero and Klaytn were the standout fallers, down 14% and 12% respectively.