The market value of Bitcoin (BTC-USD) has fallen by 50% since its peak in November last year, tracking slumping global equities amid geopolitical tensions and inflation pressure.
Over the weekend, most of the major cryptos came under pressure and the downbeat mood carried over into Monday as the world's biggest cryptocurrency headed toward levels last seen in July 2021.
Bitcoin fell 4.4% to $32,980 (£26,780) on Monday afternoon in London, dropping out of the range it’s been trading in 2022.
Read more: Live crypto prices
The token has a market cap of $635bn and accounts for nearly a third of the $2bn cryptocurrency market.
Ether (ETH-USD), the second largest crypto, which underpins the Ethereum network, crashed 5% to $2,411 at the time of writing.
Bitcoin's fresh downturn puts it closer to breaching the January low of $33,000, completely reversing the bull run that drove the token to a record $69,000 in November last year
However, despite the fresh lows, the bitcoin bull is "yet to capitulate", analysts say.
"Correlation with risk assets has been obvious", particularly with the Nasdaq (^IXIC), including tech, growth, and bubble stocks, said Neil Wilson, chief market analyst of Markets.com.
"The weekend pricing gives us a clue as to what the Nasdaq might do — futures opened lower overnight and have held losses so far with little positive catalyst obvious."
It comes as stocks remained unnerved as tightening monetary policy to stem runaway inflation and ebbing liquidity pushed traders away from speculative assets across global markets.
As cryptoassets continue to exhibit a strong correlation with equities, experts warn a bearish Federal Reserve and the Ukraine conflict could increase bitcoin's volatility, as the crypto moves further away from its promise of becoming an immutable and decentralised hedge against the institutional financial system.
Read more: What does Fed hike mean for Bitcoin?
Russian president Vladimir Putin has not declared a war on Ukraine to "enable full mobilisation", Wilson added, warning the "bear market is a while from turning".
In recent days, central banks around the world, including the UK, US, and Australia, hiked interest rates in efforts to tackle rising prices. The Fed raised its key lending rate by 50 basis points, its biggest rate raise since 2000, while the Bank of England raised UK interest rates to 1%, the highest level in 13 years. The Reserve Bank of Australia hiked its cash rate from 0.1% to 0.35% to curb inflation.
Bitcoin's decline follows the downward trend in major Asian and European equities on Monday, with London's bluechip FTSE 100 (^FTSE) shedding 0.2%, Hong Kong’s benchmark index (^HSI) tumbling 3.8%, and the Nikkei (^N225) slumping 2.5% in Japan.
The selloff has also dragged Wall Street’s S&P 500 (^GSPC) to its longest weekly losing streak in more than a decade, losing 23.53 points, or 0.6%, to 4123.34.
Some experts say the bitcoin's three-month low dip "will be used by investors as a buying opportunity".
Nigel Green, the chief executive and founder of deVere Group, said: "We except this dip to be used by ‘whales’ — who are individuals or entities that hold enough cryptocurrency to have the potential to move currency valuations — as major buying opportunities."
He said this was due to the "robust fundamentals" of the crypto, including "being a digital, borderless, viable, decentralised, tamper-proof, unconfiscatable monetary system" remaining intact.