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Bitcoin drops below $25,000, Celsius Network halts trading activity

Neils Christensen

Kitco News

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(Kitco News) - Tightening financial conditions are leading to significant market volatility, which is taking a heavy toll on the entire cryptocurrency landscape.

Bitcoin, the leading digital currency, has started a new trading week, dropping below another critical psychological level, falling below $25,000, and hitting an 18-month low. Bitcoin last traded at $24,136 per token, down more than 8% for the day.

However, leading the major tokens is Ethereum, which is down 13% on the day, last trading at $1,241 per token. The panic selling picked up momentum after the Celsius Network announced that it was halting all transactions on its platform.

"Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts," the company said in a message to clients. "We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect assets."

The volatility in Bitcoin and the crypto-landscape is creating a domino effect among leading exchanges. Binance announced Monday morning that it was halting Bitcoin withdraws on its network.

The selloff in cryptocurrencies is also taking its toll on cryptocurrency-related stocks.

MicroStrategy Inc., run by Michael Saylor, is down more than 20% at the start of a new trading week. Over the last two years, Saylor’s company has acquired 129,000 Bitcoins.

In total, the entire crypto market as sees its market capitalization drop below $1 trillion for the first time since January 2021.

Despite the volatility in cryptocurrencies, some analysts see potential for the market to carve out a bottom.

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Gareth Soloway, President and Chief Market Strategist at InTheMoneyStocks.com said that the price action and issues with Celsius could be a capitulation move

Market analysts have warned investors that digital currencies could continue to struggle as rising interest rates reduces market volatility. The selloff in the crypto market comes as U.S. 10-year bond yields rise to their highest level since 2011, hitting 3.24%.

Market analysts said that yields could continue to push higher as the Federal Reserve is expected to continue to aggressively raise interest rates through the summer to cool down red-hot inflation. The U.S. central bank is on a path to raise interest rates by 50 basis points on Wednesday.

Expectations of further aggressive action were boosted Friday after the U.S. Consumer Price Index showed inflation hitting a new 40-year high, showing an annual rise of 8.6% in May. Inflation is not forecasted to be tamed anytime soon as gasoline prices in the U.S. hit a record high on Sunday, rising above $5 a gallon.

By Neils Christensen

For Kitco News

Contact nchristensen@kitco.com
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