Bitcoin fell below $30,000 for the first time since Jun. 22 dragging other digital coins lower.
About $98 billion was wiped off the entire cryptocurrency market in 24 hours as of 12:29 a.m. ET on Tuesday, according to CoinMarketCap data.
Bitcoin was down more than 6% while ether fell nearly 9% and XRP tanked almost 10%, according to CoinDesk data.
The plunge in bitcoin came after a big sell-off in global stock markets. On Monday, the Dow Jones Industrial Average had its worst day since last October.
"There's been a broad sell-off in global markets, risk assets are down across the board," Annabelle Huang, partner at cryptocurrency financial services firm Amber Group, said.
There are "concerns of the quality and strength of economic recovery" and "broader risk assets turned weaker including high yields," Huang said. "Coupled with recent BTC (bitcoin) weakness, this just sent crypto market down further."
Since bitcoin's all-time high of nearly $65,000 in mid-April, its price has plunged over 50%.
Regulatory scrutiny
A renewed crackdown in China on cryptocurrency trading and mining has weighed on the bitcoin price.
Major regions responsible for bitcoin mining in China have forced operations to shut down. Bitcoin mining is an energy-intensive process that facilitates bitcoin transactions and creates new coins.
China's central bank has also spoken to finance and fintech companies reminding them not to offer crytpo-related services to customers.
China banned local cryptocurrency exchanges in 2017 forcing them to move offshore. That did not stop Chinese traders buying and selling digital coins. But the tough actions this year from Chinese regulators has looked to further tighten restrictions on trading and mining.
"All signals are red as BTC (bitcoin) continues to be weighed down by China's ultimate crypto ban and worsening macro economic conditions from a surge in covid variants," said Jehan Chu, founder of cryptocurrency-focused venture capital and trading firm Kenetic Capital.
Regulators around the world are also looking more closely at the crypto space.
Binance, the world's largest cryptocurrency exchange, last month was barred by U.K. authorities from carrying out any regulated activities in the country. Regulators in Japan, Canada and Thailand have also issued warnings about Binance.
"In general we're seeing more regulatory focus on crypto and bitcoin," said Vijay Ayyar, head of business development at cryptocurrency exchange Luno.
More selling ahead?
Bitcoin's fall below $30,000 could be important, according to Ayyar, who said the sell-off could go lower to test the $22,000 to $24,000 level.
From then on, bitcoin could trade in a range.
"I would see bitcoin between 20-40K ($20,000 to $40,000) for a while now before any bullishness returns," Ayyar said.
Kinetic Capital's Chu also sees potential selling ahead.
"Q1's crypto market momentum has stalled and is threatening further reversal potentially below the $25K levels," Chu said.
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