Bitcoin plunges below $23,000 as the crypto meltdown continues

London(CNN Business) Bitcoin and other cryptocurrencies continued to slide Tuesday as investors bailed out of risky assets in anticipation of sharp rises in interest rates to tackle inflation.

Nerves remain raw after two of the world's biggest cryptocurrency platforms restricted activity on Monday as the wider market meltdown continued apace.

The Celsius Network, which has 1.7 million customers, said that "extreme market conditions" had forced it to temporarily halt all withdrawals, crypto swaps and transfers between accounts.

"We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect assets," the company said in a blog post.

The UK-registered company has about $3.7 billion in assets, according to its website. It pays interest on cryptocurrency deposits, and loans them out to make a return.

"Celsius suspending withdrawals yesterday gave extra downside momentum," noted Jeffrey Halley, senior market analyst, Asia Pacific, at Oanda. "I can only assume the next big level for bitcoin psychologically will be $20,000."

The cryptocurrency market has taken a hammering in recent months after its pandemic boom turned to bust. As the world's major central banks have hiked interest rates to tame spiraling inflation, traders have rushed to ditch riskier investments, including their volatile crypto assets.

Bitcoin, the world's most valuable cryptocurrency, fell about 8% Tuesday, dropping below $23,000. It has lost about 25% of its value since Friday — putting it about 67% below its all-time high in November last year, when it traded around $69,000, according to data from Coinbase.

Ether, the second-most-valuable digital coin, dropped 4%, taking its losses since Friday to about 32%. It has now lost about 75% of its value since November.

Binance, the world's biggest cryptocurrency exchange, suspended withdrawals on its bitcoin network for a few hours on Monday. The company said some transactions had gotten "stuck" and were causing a backlog.

"Binance team is working on a long-term solution to accelerate pending transactions on the bitcoin (BTC) network and prevent similar situations in the future," it said in a statement.

So-called "stablecoins" — cryptocurrencies that are tied to the value of more traditional assets — have also taken a hit. Tether, a popular stablecoin, broke its peg to the US dollar in May, puncturing the view that it could serve as a hedge against volatility.

TerraUSD, a riskier algorithmic stablecoin that used complex code to peg its value to the the US dollar, collapsed the same month, wiping out the savings of thousands of investors. The coin was valued at a little over $18 billion in early May before it crashed, according to data from CoinMarketCap.

Celsius Network did not say when it would allow customers to withdraw their deposits again, only that it would "take time."

Meanwhile, governments are watching the fallout of the crypto crash closely and could move to protect investors.

"There are many risks associated with cryptocurrencies," United States Treasury Secretary Janet Yellen told the Senate last month. She said her department was due to release a report on the matter.

— Julia Horowitz contributed reporting.