Bitcoin stems heavy losses but pessimism reigns in crypto markets

Bitcoin steadied on Tuesday after initially falling to a new 18-month low as major crypto lender Celsius Network’s freezing of withdrawals and the prospect of sharp U.S. interest rate rises shook the volatile asset class.

Bitcoin BTC=BTSP clawed its way to positive territory after falling as much as 7.3% to $20,816, its lowest since Dec. 2020. It was last up 1.1%.

The world’s largest cryptocurrency fell 15% on Monday, its biggest one-day drop since March 2020. Bitcoin is down about half this year and over 20% since Friday alone. Since its record high of $69,000 in November, it has slumped nearly 70%.

New Jersey-based Celsius said in a blog post on Monday, citing extreme market conditions, that it had frozen withdrawals and transfers between accounts, to stabilise liquidity and operations while we take steps to preserve and protect assets.

The move, combined with expectations of sharper U.S. Federal Reserve interest rate hikes after high U.S. inflation data last week, pushed the value of the crypto market under $1 trillion for the first time since Jan. 2021.