Bitcoin has dropped to its lowest level since its sudden collapse in December amid rising expectations of hiking borrowing rates pressuring some of the best performing assets in recent years.

"Given the current macroeconomic environment, leverage in the bitcoin market, and the recent resilience seen in the altcoin market, we believe it pays to be overweight in relation to Ethereum and other smart contract platforms. We probably won't bet on bitcoin in the short term, but we think there is an opportunity to go into long volatility with derivatives strategies," Fundstrat digital asset strategists Sean Farrell and Will McAvoy said.

The recent fluctuations in cryptocurrencies occur amid a turbulent period for financial markets. The spike in inflation is forcing central banks to tighten monetary policy, threatening to curb the winds of liquidity that have lifted a wide range of assets. US stocks nosedived even more after the Fed pointed to the possibility of an earlier and faster hike in interest rates.

"The Fed is aggressive. Crypto-cryptocurrency companies are seeing a strong reaction and they are viewed as extremely risky assets, despite long-term trends in inflation, store of value and so on," Stephen Wellett, chief executive and co-founder of crypto platform FRNT Financial said.

Other sectors of the cryptocurrency world are also put under pressure, bitcoin mining stocks have been hit hard amid unstable situation in Kazakhstan, which is the world's second largest mining center with a hash rate of over 18%. At the moment, the bitcoin hashrate has already fallen by 12%. Against this background, there were rumors that miners could simply leave the country and thereby lower the hashrate even more.