After a tumultuous start to the year, Bitcoin has hit a low of $38,000 (£28,661.37). This is still above the market crash in summer 2021, but dropping below its psychological safety net of $40,000 could trigger further sell-offs.
While the market is showing some signs of recovery, experts predict that selling pressure could push prices down to $37,000 or $33,500.
Even with the market in the green over the last 24 hours, Ethereum is still down 8.14% in the last week, while Bitcoin has lost almost 10%.
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The downward trend has been triggered by the escalating geopolitical tension between Ukraine and Russia.
With the threat of Russia invading Ukraine still ongoing, investors are pulling away from speculative, risky assets. It's too early to call what will happen, as Ukraine recently legalised Bitcoin.
Investors were already spooked by the USA's Federal Reserve hiking interest rates to deal with inflation.
This latest crash was accelerated by a rumoured “exploit” of popular NFT trading platform OpenSea. OpenSea co-founder and chief executive Devin Finzer posted to Twitter late last night, saying: "As far as we can tell, this is a phishing attack. We don’t believe it’s connected to the OpenSea website. It appears 32 users thus far have signed a malicious payload from an attacker, and some of their NFTs were stolen.”
Users are thought to be exploiting the issue to buy NFTs at much lower prices than its asking price, exposing an ongoing flaw in the design.
The latest crypto price crash has wiped almost $300bn from the combined crypto market, giving it an overall market cap of $1.81tn.
Dipping below $2m in overall market value backs up market predictions of a potential continuous bear market or a 'crypto winter'.
However, Vitalik Buterin , co-founder of the Ethereum blockchain, argues that a crypto winter could be pretty helpful for the industry by allowing time to nurture long-term sustainable projects over short-term speculative attention that has defined the tumultuous market so far.
