Cryptocurrencies, which have been trending lower all month, began plunging on Monday after US-based crypto lending platform Celsius Network froze all account withdrawals and appeared to be on the brink of insolvency.
The platform last August said it was holding over $US20 billion ($A28.7 billion) in assets on behalf of 950,000 global customers, making it one of the largest custodial crypto platforms worldwide.
Adding to the market's fears, the world's largest crypto exchange, Binance, also paused Bitcoin withdrawals for a few hours on Monday. A spokesperson said that was simply due to a "stuck transaction" and that withdrawals were now being processed normally.
Still on Tuesday afternoon Bitcoin was down 13 per cent in the past 24 hours to $US22,300, having lost two-thirds of its value in the past seven months. Ethereum had dropped 13 per cent to $US1,177 and is down by 75 per cent since November 2021.
The total capitalisation of the cryptocurrency market was below $US1 trillion for the first time since January 2021, after falling 10 per cent in 24 hours to $US928 billion.
David Haslop, the 33-year-old founder of a Gold Coast-based crypto education platform called the Crypto Den, said he expected Bitcoin to drop to at least $US20,000, the peak it reached in December 2017.
"That's that my first target, and failing to hold that, I've got buy orders set at $14,000 and $9,000. That's where I plan on coming into the market," he told AAP.
"Those buy orders may never get hit, $20,000 might be the bottom, who knows? But with the entire world economic landscape right now, it's certainly not off the table that Bitcoin goes below 20 (thousand). Currently the momentum is just so high, I don't think it'd take much to punch through it and close below."
Michael Sloggett, a 39-year-old Townsville-based crypto trader with a large online following, declared the crypto bull run over in December and said he could see Bitcoin crashing to $US12,000
"People need cash right now like they need air," he said.
"Everything's gotten more expensive. It gets to the point where it starts dropping this fast, the people who bought at $60,000 just can't take it anymore, they're happy to get back whatever they can," he said.
But while people are "depressed" and "panicking," Mr Sloggett said there had not yet been the complete capitulation that indicated a market bottom.
"One of the greatest quotes that I try to live by is, when everyone is completely decimated and in total despair, that's the point of maximum financial possibility. And we're not there yet."
Both Mr Sloggett and Mr Haslop said that while the crash would shake out many "altcoins" - smaller cryptocurrencies promoted as alternatives to Bitcoin and Ethereum - it was normal for the crypto market to go through boom and bust cycles.
"We're still building the future of finance here - don't miss the forest for the trees," tweeted Anthony Sassano, a Melbourne-based Ethereum angel investor and advisor.
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