Key Points
- Cryptocurrencies plunged on Monday, with Bitcoin dropping below $86,000 and other major coins following.
- Experts are concerned by weak inflows into Bitcoin ETFs and a noticeable lack of “dip buyers.”
- The selloff is linked to broader global market anxiety, including potential interest rate changes in Japan and the U.S.
- A credit rating downgrade for the USDT stablecoin and a new warning from China added to the negative sentiment.
The cryptocurrency market took another sharp dive on Monday, reigniting a selloff that had seemed to be over. Bitcoin sank as much as 6%, falling below $86,000, while other major tokens like Ether and Solana also saw steep losses before recovering slightly.
This latest drop puts the crypto market back on shaky ground. It follows a brutal selloff that began in October, after Bitcoin reached an all-time high. While prices recovered a bit last week, climbing back over $90,000, Monday’s plunge has traders bracing for more downside.
Market experts are worried because new money isn’t flowing into Bitcoin ETFs as it used to, and the bargain hunters, often called “dip buyers,” are nowhere to be seen. “The biggest concern is the meager inflows into Bitcoin exchange-traded funds and the absence of dip buyers,” said Sean McNulty at FalconX. He noted that traders are now watching the $80,000 level for Bitcoin as the next major support test.
It’s not just a crypto problem. Global financial markets are on edge amid broader economic shifts. Worries about a potential interest rate hike in Japan and uncertainty over future U.S. Federal Reserve policy are making investors nervous and causing them to pull back from riskier assets like crypto.
A string of bad news over the weekend also fueled the fire. The CEO of Strategy Inc., a major corporate Bitcoin holder, hinted the company might sell some of its tokens if necessary.
On top of that, S&P Global Ratings downgraded the world’s largest stablecoin, USDT, and China’s central bank issued another stern warning about the risks of virtual currencies. This combination of factors has renewed the selling pressure across the digital asset space.
