June 14, 2022: -On Monday, Bitcoin tumbled below $24,000, hitting its lesser level since December 2020, as investors dumped crypto between a broader sell-off in risk assets.

Therefore, a crypto lending company called Celsius has paused withdrawals for its customers, which sparks fears of contagion into the broader market.

The world’s biggest cryptocurrency, bitcoin, briefly dropped below the $24,000 mark around 05:00 a.m. ET, according to CoinDesk data, before increasing back above that level shortly after.

Over the weekend and Monday, over $200 billion had been wiped off the entire cryptocurrency market. The cryptocurrency market capitalization has decreased below $1 trillion for the first time since February 2021, according to data from CoinMarketCap.

Macro factors contribute to the bearishness in the crypto markets, with rampant inflation which continues and the U.S. Federal Reserve expected to hike interest rates to control increasing prices.

In the previous week, U.S. indices sold off heavily, with the tech-heavy Nasdaq dropping sharply. Bitcoin and other cryptocurrencies correlate with stocks and other risk assets. When these indices decrease, crypto drops as well.

“Since Nov 2021, sentiment is transforming drastically given the Fed rate hikes and inflation management. We’re potentially looking at a recession given the FED may need to tackle the market side to manage inflation finally,” Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, told CNBC.

“All this points to the market not completely having bottomed, and unless the Fed can take a breather, we will not see bullishness return.”

Ayyar noted that bitcoin had declined around 80% from its previous record high at an earlier bear market. It is currently down nearly 63% from its last all-time high, which hit in November.

“We could see much lower bitcoin prices in the following month or two,” Ayyar said.