Bitcoin (BTC) has dropped below $5,000 even as market uncertainty in the wake of the coronavirus outbreak pushed the U.S. Federal Reserve to cut interest rates to zero.

The cryptocurrency slumped below $5,000 as the European trading day got underway, according to CoinDesk's Bitcoin Price Index. After breaching the psychological milestone at just before 07:00 UTC, the largest cryptocurrency by market cap was coming close to falling past $4,500 at 08:00 at press time, down 16 percent over 24 hours.

Other cryptocurrencies have experienced double-digit falls, too. At the time of writing, ether (ETH) was down by over 18 percent, with XRP (VRP) fell by 15 percent and Litecoin (LTC) by 16 percent. The total market cap for the digital asset class has plunged by more than $20 billion since Sunday morning, according to CoinMarketCap.

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Bitcoin Price Index

The sell-off came hours after the Federal Reserve announced a range of actions Sunday night to help support financial markets shaken by the coronavirus' effect on the global economy.

Chief among them was another emergency cut to interest rates, this time by a full percentage point, to 0.0-0.25 percent – the lowest since 2015 – as well as a $700 billion asset purchase of U.S. Treasury bills. Following the announcement, other central banks, including those of Japan, Australia and New Zealand, also unveiled their own stimulus packages.

Despite being the largest intervention since the 2008 financial crisis, a mass sell-off across asset classes continued as market confidence in the ability of central banks to mitigate the effects of a possible recession fell to a low ebb.

Bitcoin's movements have mirrored those of the traditional markets during this crisis, countering the popular safe-haven narrative. After spiking by as much as 14 percent immediately following the Fed's announcement, it quickly corrected and continued on a strong downwards trajectory.

In a note Monday, eToro analyst Adam Vettese said that "double-digit falls for crypto assets" came as investors started to "dump risk assets without prejudice."

Meanwhile, Bobby Ong, COO of CoinGecko, told CoinDesk: "In my opinion, the price drop below $5,000 today is due to [crypto derivatives exchange] Bitmex's liquidations. Some traders believe Bitmex has a huge backlog of liquidations to be done from last week’s crazy free fall, which saw price fall 50 percent.”

As reported, the sharp fall in bitcoin prices last Thursday triggered the most long-short liquidations on BitMEX in 16 months.

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