Bitcoin continues slide that’s roiling markets, threatens to break below $80,000
Bitcoin experienced a significant drop in value following a sell-off in major U.S. stock indices. The cryptocurrency has historically been closely correlated with the movement of the Nasdaq index, and this recent decline is no exception.
At one point, Bitcoin plummeted by as much as 6% early on Friday, teetering just above the critical $80,000 support level. This sharp decline brought the token to a low of $80,548, its lowest point since April 11. The sell-off was exacerbated by widespread liquidations of highly leveraged crypto positions in October.
According to Citi analyst Alex Saunders, the recent price action in Bitcoin has been lackluster, with long-time and larger holders of the token becoming more active. Additionally, ETF flows, which have historically been a key driver of Bitcoin prices, have started to dry up, adding to concerns about short-term performance.
Despite the initial drop, Bitcoin has managed to recover some of its losses and is currently trading down 4% at $82,939.59, according to Coin Metrics. However, the cryptocurrency has still fallen by 12% since the beginning of the week and approximately 26% over the last month.
The decline in Bitcoin’s value can be attributed to the broader pressure in the U.S. stock market, which has led investors to shift away from volatile assets like cryptocurrencies and artificial intelligence stocks towards safer investments like gold. The Nasdaq Composite, for example, fell by 2% on Thursday following a rally sparked by Nvidia’s strong earnings report on Wednesday.
The dwindling performance of AI stocks has also put pressure on cryptocurrency stocks, with companies like Strategy, American Bitcoin, and Riot Platforms all experiencing losses. Strategy, a bitcoin treasury firm, has fallen by 2% in a single day and is down by 42% over the past month. American Bitcoin and Riot Platforms have also shed 7% and 4% in Thursday’s session, respectively.
Despite setting several price records earlier in the year, Bitcoin is currently down by 9% since the beginning of the year. The cryptocurrency reached a record high of just over $126,000 in early October following supportive policies from the Trump administration. However, it has since dropped by more than 30% from that peak.
“We’re currently in very oversold territory for bitcoin,” noted Sebastian Pedro Bea, chief investment officer at crypto asset management firm ReserveOne, in a statement to CNBC.
Overall, the recent price fluctuations in Bitcoin underscore the ongoing volatility in the cryptocurrency market and highlight the interconnectedness between digital assets and traditional financial markets.
