The crypto market sank to its lowest levels in more than five months as Japan's stock market balked at recessionary fears following a rate hike by its central bank last week.

Bitcoin and Ethereum, the two largest cryptos by market capitalization, have fallen considerably over the last 24 hours, down 9% and 18%, respectively.

Trading volumes surged by just over 214% Sunday compared to Saturday, driven by heavy dip buying, with volumes up around 226%, a spokesperson for crypto exchange Swyftx told Decrypt.

Bitcoin, Solana, and Ethereum were the most traded, dominating the market at "unusual levels" and accounting for approximately 67% of all volume late Sunday.

Notably, Bitcoin buys were around three times the number of sales, and similar figures were observed for Ethereum compared to the normal 2:1 buy-to-sell ratio, they said.

Other large-cap cryptos have seen declines ranging between 6% and 20%, CoinGecko data shows.

"Recessionary fears drove a huge sell-off in U.S. equity markets last Friday," Sylvia To, director of Bullish Capital, the venture capital arm of Bullish, told Decrypt.

That's now spread over to crypto as investors seek more traditional safe-haven assets, she said.

Sunday's drop, the single-largest daily decline since April 13, comes as the broader market and Japan face an equity rout as investors sour on major tech stocks in the U.S. and abroad.

"The U.S. unemployment rate climbed from 4.1% to 4.3% in June, sparking concern of a slowing labor market," To said. "The fear appears to have spread with the Nikkei 225."

On Sunday, the Topix and Nikkei 225 stock indexes in Japan tumbled more than 7% in morning trading in Tokyo, extending their losses to around 20% from their July 11 peaks and signaling a bear market, Bloomberg reported.

The Topix, or Tokyo Stock Price Index, measures the performance of all companies listed on the Tokyo Stock Exchange's main market segment.

The steep drop in the Topix triggered a circuit breaker, halting trading on that market for approximately 10 minutes, per the report.

Both benchmarks are headed for their worst three-day decline since the 2011 tsunami and Fukushima nuclear disaster.

It comes as the Bank of Japan raised its benchmark interest rate to 0.25%, up from the previous range of 0% to 0.1% at the end of last month.

That's the highest level for rates since 2008 as the country takes its first steps in moving away from its decade-long policy of near-zero interest rates.

The rate hike was reportedly part of a broader strategy to tighten monetary policy, which also included a reduction in the purchase of Japanese government bonds.

The uncertainty leaves domestic traders and markets in doubt as the cost of shipping exports overseas from the island nation rises ahead of any further economic tightening.

Several tailwinds are also converging, with uncertainty mounting over the next U.S. president and increasing tensions in the Middle East, Decrypt was told on Sunday.

In the past 24 hours, the crypto market has seen some $780 million in liquidations, with the majority of the wipeout stemming from those betting on higher prices, CoinGlass data shows.

"That signals investors are cautious of risk-assets and may be looking over to safe-haven assets like bonds while growth fears remain a headwind," To said.