(Yicai) Nov. 18 -- The price of Bitcoin, the first decentralized cryptocurrency, has plunged to less than USD90,000, a level below that a year earlier, with other top crypto assets also tumbling.

Bitcoin price has dropped 5.4 percent to USD89,942.60 over the past 24 hours as of 12.27 a.m. Beijing time, according to data from Investing.com. In comparison, the price was USD90,449.91 a year ago, while reaching as high as 124,310.60 and as low as 75,004.68 at various points this year.

Since hitting a record high in October, the price of Bitcoin has been sharply declining, erasing about USD600 billion of its market capitalization from when it reached its peak. Other major tokens have also weakened, with Ethereum falling 6.4 percent to USD2,980 over the past 24 hours, despite topping USD4,830.07 in August.

The recent market situation is a result of "multiple pressures" formed under the combined effects of macro expectations, funding conditions, and trading sentiment, several market participants told Yicai.

There are repeated fluctuations in macro expectations, Ding Yuan, director of the Sinohope Research Institute, said to Yicai. "The market lacks a consistent judgment on the Federal Reserve's policy direction for next month, with interest rate cut expectations briefly heating up, but then quickly retreating due to economic data disruptions. 

"Risk assets are generally under pressure, and risk-sensitive assets, including US stocks and cryptocurrencies, have all experienced adjustments," Ding pointed out.

Bitcoin spot exchange-traded funds, which performed well earlier this year, have seen continuous net outflows since September, Ding noted. Some long-term institutional holders have chosen to realize profits during this tightening liquidity phase, and the redemption pressure associated with deleveraging has significantly weakened the market's most important source of external incremental capital, he added.

Vulnerabilities on the trading level are also accumulating, with the large-scale liquidation on Oct. 11 continuing to cast a shadow over the market. The combination of high leverage levels and swinging sentiment makes the market more susceptible to liquidity shocks. 

Over 230,000 trading accounts were liquidated in the past 24 hours, with the total amount, mainly in Bitcoin contracts, exceeding USD1 billion, according to data from Coinglass.

From a medium to long-term perspective, institutionalization and compliance remain key to Bitcoin's ability to solidify its mainstream position, Ding said, adding that its framework of serving as a hedge against inflation, currency devaluation, and geopolitical risks still holds. 

However, it will take time for Bitcoin to evolve into a mature asset, Ding said. The core variables that will influence the market's direction in the future include the further improvement of exchange-traded fund channels, the clarification of the global regulatory environment, and the sustained penetration of actual demand for on-chain finance and cross-border payments, he stressed.

Editor: Martin Kadiev