This is the second time this year that the world's largest digital currency by market value has fallen below $40,000 hitting $38,642 mid-way through the Asia trading session.

According to CoinGecko, Bitcoin was down by nearly 8% in the last 24 hours, while Ether was down by nearly 10%, hitting $2,841 during the intradate

Other layer-1-based tokens such as Solana and Cardano have also been dragged down, posting declines of 9% and 10% respectively. Overall digital tokens have shed some $1 trillion in value since a November peak.

“Bitcoin and the broader crypto market remain subject to the whims of macro variables,” Fundstrat Digital Asset Research strategists Sean Farrell and Will McEvoy said.

Stirred by the prospect of tighter monetary policy and potentially raising the interest rate in the U.S., digital coins have become symbolic of a retreat in speculative investments, according to Bloomberg.

For the past several years, bitcoin has soared in value due to a popular narrative revolving around institutional adoption, suitability as a portfolio hedge and store of value.

Following the dip in the value of cryptocurrencies, nearly $600 million have been liquidated in the past twelve hours, according to CoinGlass. Bitcoin led the liquidation pack at $250 million, followed by ether at $163 million and SOL at $10.9 million.

Among cryptocurrency exchange platforms, Binance led the liquidation group at $173 million, followed by Asia-focused exchange Okex at $170 million.