Crypto Markets Plunge Amid U.S. Recession Fears

Bitcoin and ether have plunged to multi-month lows due to fears of a U.S. recession, igniting a rush to safe-haven assets. Despite the approval of an ETF to track these cryptocurrencies, both have declined significantly in recent selloffs attributed to economic and geopolitical concerns.

Bitcoin and ether tumbled on Monday, reaching multi-month lows as fears of a possible U.S. recession, triggered by weak economic data, gripped financial markets and led investors to seek safe-haven assets.

This year, crypto markets were buoyed by the U.S. Securities and Exchange Commission's approval of an exchange-traded fund (ETF) to track the spot prices of bitcoin and ether. However, recent months have seen bitcoin plummet nearly 20% from its March 2024 highs, in tandem with a broader selloff in global equities, as recession fears and geopolitical tensions mount.

"It's a big reminder that Bitcoin and crypto in general are risk assets and sit at the pointy end of the risk spectrum," stated Tony Sycamore, market analyst at IG. Bitcoin dropped to $53,091, marking its lowest point since late February, and was last recorded at $54,112. Ether also fell to its weakest level since mid-January, plunging 16% to $2,300. Sycamore noted that bitcoin is testing its trend channel support in the $54,000/$53,000 range, which is critical to avoid a further drop towards $48,000.

(With inputs from agencies.)