Bitcoin heads for worst month since 2022 amid broad crypto selloff

Bitcoin is on track for its most severe monthly decline since the catastrophic crypto collapse of 2022.

The world's biggest cryptocurrency plunged to a seven-month low, breaking below $86,000 and erasing all its gains for the year.

The sell-off has been broad, affecting the entire digital asset sector.

Ether, the second-largest token, also experienced a sharp fall, dropping to a four month low.

The dramatic slide has wiped around $1.2 trillion from the total market value of all cryptocurrencies over the past six weeks.

Digital analysts highlight a shifting market mood as the major cause.

As noted by one report, “Cryptocurrencies are often used by investors as a barometer of risk appetite, and the sharp slide shows how fragile the mood in the market has turned.”

This pessimism is highlighted in tumbles for high-flying tech stocks and spiking market volatility, as investors claim imminent interest rate cuts by the Federal Reserve fade.

This downturn marks a stunning reversal from October, when favourable regulatory circumstances propelled Bitcoin to a record high above $120,000.

But the market remains scarred by a record crash last month that triggered over $19 billion in liquidations.

As per the digital asset research firm CryptoQuant, “Bitcoin market conditions are the most bearish they have been since the current bull cycle started in January 2023.”

“We are highly likely to have seen most of this cycle's demand wave pass,” the firm added.

With this crash, the crypto-adjacent stock also got affected. Shares of MicroStrategy, a prominent corporate holder of bitcoin, have fallen to one-year lows, highlighting how the downturn is rippling beyond direct crypto investments.