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The dramatic selloff Monday in cryptocurrencies, which fell in tandem with stocks amid concerns about a slowing U.S. economy, not only made investors nervous, but also tested the case of bitcoin as a safe-haven investment.

Here's what experts say happened over the past few days and what lies ahead for the crypto markets as the U.S. navigates fears of economic uncertainty.

What Happened Amid The Crypto Sell-Off?

Bitcoin ( BTCUSD ) isn't quite as divorced from the price swings in traditional markets as was once thought, calling into question its proposition as digital gold.

As the turmoil in stocks spread further to crypto markets, bitcoin fell more than 18% on Monday to drop below $50,000 , a level not seen since February. While bitcoin recovered to around $56,000 on Tuesday, it's still down nearly 20% since early last week.

The rest of the crypto market fared even worse on Monday, as alternative crypto assets still tend to follow bitcoin's lead rather than move on their own accord.

However, ether's ( ETHUSD ) near-26% drop to a low of $2,116 could be attributed to investors getting nervous about large movements of funds from trading firm Jump Trading to various crypto exchanges that started on July 25, according to data blockchain intelligence firm Arkham Intelligence.

Where's Crypto Headed Next? Perhaps Towards Volatility

In the short-term there could be more volatility in store for crypto assets.

Bitwise's Chief Investment Officer Matt Hougan suggests watching out for a few signs that could show where the crypto markets are headed—forced crypto liquidations as leveraged traders scramble amid a price drop, financial health of crypto firms and flows for crypto spot exchange-traded products.

Should there be a recession in the U.S., bitcoin will decline, though not as much as it has in the past, Grayscale's Head of Research Zach Pandl said.

"Downside risks to token prices are lower than in the previous cycle, in our view, due to relatively low altcoin valuations, limited credit/leverage in crypto markets, and institutional demand for spot #Bitcoin and #Ethereum ETPs," Pandl posted on X.

Analysts at Bernstein are more optimistic. "If rate cuts and monetary liquidity is the usual template response to U.S. recession fears, we expect ‘hard assets’ such as bitcoin (digital gold) to reprice up," the analysts wrote, according to The Block .

Time to Hold?

Hougan suggests investors ignore short-term price cues and focus on the long-term fundamentals of bitcoin investing.

He compared the recent volatility in markets, both stocks and crypto, to the sharp decline seen on March 12, 2020 when the world realized COVID-19 was going to be a serious issue. After falling 37% on that day, bitcoin went on to have a tremendous bull run and saw greater than 1,000% gains over the next 12 months.

"In retrospect, March 12, 2020 wasn’t a time to panic," wrote Hougan in a recent note. "It was the best buying opportunity for bitcoin in a decade."

Read the original article on Investopedia .