Crypto
prices
rebounded
only
a
bit
with
bitcoin
(BTC)
hitting
$55,000
during
the
U.S.
trading
session
Monday
after
earlier
in
the
day
plunging
to
just
above
$49,000.
At
press
time,
bitcoin
was
trading
at
$53,000,
down
10%
over
the
past
24
hours.
The
broad-market
benchmark
CoinDesk
20
Index
also
posted
a
similar
rebound,
but
was
still
13%
lower
than
24
hours
ago.
Ether
(ETH),
which
saw
an
even
steeper
decline
exacerbated
by
large
crypto
trading
firm
selling
the
asset,
saw
a
similar
bounce,
but
remains
down
13%
for
the
session.
The
rebound
happened
as
U.S.
equity
markets
also
cut
some
of
their
early-morning
plunge,
with
the
Nasdaq
lower
by
3.6%
shortly
before
the
close
versus
an
earlier
tumble
of
more
than
6%.
Brutal
but
typical
drawdown
for
BTC
It
was
only
a
week
ago
when
BTC
traded
near
$70,000
with
traders
ecstatic
about
a
likely
Trump
presidency
and
hopes
of
making
the
largest
crypto
a
strategic
asset.
Since
then,
prices
tumbled
30%
from
peak
to
trough,
making
it
the
steepest
decline
during
this
market
cycle.
While
the
action
felt
brutal,
the
magnitude
of
the
drawdown
was
typical
during
previous
bull
markets,
Alex
Thorn,
head
of
firmwide
research
at
Galaxy,
noted
Monday.
The
rapid
pace
of
the
drawdown
was
reminiscent
of
the
Covid-19
triggered
crash
of
2020,
said
Daniel
Cheung,
co-founder
of
digital
asset
venture
firm
Syncracy
Capital,
even
though
this
was
less
severe.
BTC
plummeted
57%
in
six
days
in
mid-March.
“Expect
crypto
to
recover
relatively
quickly
given
most
of
the
selling
at
this
point
is
forced
and
complete
panic,”
Cheung
said.
“Ironically,
the
floodgates
to
a
much
greater
bull
market
has
been
opened.”
Matt
Hougan,
CEO
of
asset
manager
Bitwise,
also
compared
this
weekend’s
crash
to
March
2020
in
a
market
update.
“It
felt
as
if
we
might
never
recover.
The
media
claimed
bitcoin
had
failed
its
test
as
a
hedge
asset,”
Hougan
said.
“Emotions
aside,
history
suggests
that
this
weekend’s
sell-off
is
a
buying
opportunity.”
While
the
current
situation
might
offer
a
good
long-term
entry,
short-term
risks
are
present
still.
Markus
Thielen,
founder
of
10x
Research,
said
that
BTC
might
dip
to
as
low
as
$42,000
if
the
current
economic
weakness
deteriorates
further
into
a
recession.