Bitcoin Sinks To Six-Month Low, Leading Crypto Market Downward
Following a late-session plunge, which sent the Nasdaq
COIN360
Bitcoin sank to $38,234—its lowest price level since mid-summer, according to Messari.
As of 7:27 a.m. EST, it is trading around $38,538, 43% lower than its record-high of $69,006, recorded on November 10.
“We expect BTC to find a bid around the $35,000 mark,” wrote Pankaj Balani, CEO and founder of crypto derivatives trading platform Delta Exchange, in a note to Forbes. “In the short term we can bounce to challenge the $45,000-$50,000 zone but the overall outlook remains bearish as liquidity remains tight.”
The second largest cryptocurrency by market capitalization, ether, has mirrored bitcoin’s losses, sliding 11.7% over the past 24 hours to $2,806.
Most market sectors, including DeFi and gaming, have suffered significant losses. Data from analytics tool Coinglass shows that over $700 million worth of crypto futures contracts across 190,000 trading positions have been liquidated over the past day.
Jan Wüstenfeld, on-chain analyst for crypto research firm Quantum Economics, cited “high macro uncertainty—most importantly high inflation, and in reaction to that, a more hawkish Federal Reserve Bank”—as the reason for the market’s negative performance.
As of late, cryptocurrencies have moved increasingly in sync with the broader financial markets. “Currently, the S&P 500 seems to dictate the direction of bitcoin and the overall crypto market, evident by correlations reaching new highs,” crypto analytics firm Arcane Research highlighted in a note issued on Tuesday. “Bitcoin’s 90-day correlation to the S&P 500 is currently at its highest since October 2020.”
Amid expectations that the Federal Reserve will soon start to raise interest rates, investors have been shedding their positions in riskier assets. Both the Dow Jones Industrial Average and S&P 500 are on track for a third straight week of losses. The Nasdaq is down nearly 5% on the week.
Accordingly, bitcoin mining and other crypto proxy stocks have continued to slide. Most are down over 10% so far this year.
Performance of stocks with crypto exposure over the past 24 hours
