Bitcoin fell below the psychologically important $40,000 support level on Friday, dropping more than 10% in what was a selloff across the entire cryptocurrency market. The collapse continues to deepen as the world’s largest cryptocurrency saw its value fall by $5,000, down 8% in the past day.

Bitcoin is currently trading at $35,700, even when trading activity has increased significantly, indicating a sell-off in progress. The coin is down more than 40% from its all-time high of $69,000.

Outside of stablecoins, the world’s 100 largest cryptocurrency tokens are currently trading in the red, with some coins down as much as 30%. Ether, the second-largest cryptocurrency, slipped below its $3,000 support level. It is down 15% in the last 24 hours, falling to $2,400.

Binance Coin, the fourth largest coin, fell over 17% and Cardano is down over 15%. Dogecoin fell over 13% while Solana and Polkadot crashed 20%.

Meanwhile, according to data from, the cryptocurrency market capitalization has shrunk by more than 12% in the past 24 hours.

What triggered the crash?

The move would be made because of the risks the cryptocurrency poses to financial stability, monetary policy sovereignty as well as the financial security of its citizens, the bank said. The legal status of cryptocurrency has changed a lot in the country in the past.

While Russia has resisted cryptocurrencies for years, citing terrorist financing threats, it still granted legal status to cryptocurrencies in 2020. However, the use of tokens as payments has been banned.

What other factors affect the bearish movement?

Even before news of the Russian central bank demanding an immediate ban on cryptocurrency, much of the market was already trading in the red.

The Federal Reserve’s hawkish stance: Broader macro conditions, the Federal Reserve’s hawkish stance and decision to raise interest rates as early as March, and tech companies’ below-expected earnings all had an impact.

The US Federal Reserve, arguably the most important central bank in the world, is expected to raise interest rates several times during the year to curb rising inflation in the country. The US Fed’s hawkish stance made investors more cautious about investing, while weak macro indicators due to the renewed wave of COVID-19 made bond yields significantly more attractive to investors.

Wall Street liquidation: As a result, riskier investments like cryptocurrency and stocks in technology and growth stocks saw strong selling. Tech stock earnings were also weaker, further exacerbating the broader negative sentiment in the market.
Growing correlation with traditional markets: Additionally, market experts believe that Bitcoin’s correlation with Wall Street is increasing due to the massive institutional interest in the crypto markets. So, when Wall Street witnesses a sell-off, it ripples through the crypto market.

Leveraged long positions: According to a report on CoinDesk, another reason for selling is a leveraged long position. Investors who held long positions in the crypto expecting the price to rise are selling their positions. According to, long positions worth over $1 billion have been liquidated in the past 24 hours. Bitcoin led liquidations at $250 million, followed by Ether at $160 million.

Market sell-offs occur when investors don’t have the money to fund the margin call.

Impact and prospects

Despite negative signals from the Russian government, the granting of legal status has seen Russia quickly become one of the largest crypto adopters in the world. China’s cryptocurrency ban led to a similar rout before the crypto market cut losses and gains. But Russia had become the third largest Bitcoin mining center in the world.

Now, news of an impending ban has soured market sentiment as global factors have already resulted in significant downward pressure on the crypto market. And when panic selling combines with leverage, the result is often disaster for a market that trades around the clock.

While this isn’t the first major crisis the crypto has seen in the past two years, investors say even a 30% drop is just a blimp in the broader bullish rally the crypto seems to be on. to be.

(Edited by : Yashi Gupta)