Bitcoin (BTC) falls as market focuses on Celsius issue, Fed rate hike

Bitcoin and other cryptocurrencies fell sharply as investors dump risk assets. A crypto lending company called Celsius pausing withdrawals for its customers, sparking fears of contagion into the broader market.

After hitting its lowest level in more than a year on Sunday, the virtual currency fell further as investors dumped it due to a broader sell-off in risk assets.

There are fears that the broader market will be affected by the pause in withdrawals by Celsius.

At 4 a.m., the world's largest coin was worth $24,699.99. According to the data, it was on Monday.

Over the weekend and into Monday morning, more than $150 billion had been wiped off the market.

The bearishness in the markets is due to macro factors such as rampant inflation and the U.S. Federal Reserve expected to raise interest rates this week.

The tech-laden Nasdaq dropped sharply last week. Cryptocurrencies tend to correlate with riskier assets. When the indices go down, the coin goes down too.

Sentiment has changed a lot since Nov 2021. The vice president of corporate development and international at Luno told CNBC that they are potentially looking at a recession.

Unless the Fed is able to take a break, we won't see bullishness return.

Ayyar noted that in previous bear markets, the price of the digital currency had fallen. It is down from its last all-time high, which it hit in November, by over sixty percent.

Ayyar said that there could be a lot of lower prices over the next month.

Since the collapse of terraUSD and luna in May, the market has been on edge.

Celsius said on Monday that it was pausing all withdrawals, swaps and transfers because of extreme market conditions.

Celsius advertises to its users that they can get a yield of 18% through the platform. Users deposit their money. It is then lent to institutions and other people. The users get yield as a result of the revenue earned by Celsius.

The sell-off of thecryptocurrencies has hurt Celsius. According to its website, the company had $11.8 billion in assets as of May 17th, down from more than $26 billion in October last year.

The CEL is down more than 50% in the last 24 hours. There is concern among investors in the market.

The Celsius situation is making the fire worse.

The markets were already under pressure from inflation concerns and the interest rate hikes, but with the emergence of the digital currency, such events could cause outsized declines.