Bitcoin fell sharply after the sell-off of major US equity indices. Bitcoin has been closely related to the price movement of the Nasdaq index.
Luca MacGregor | Bloomberg | Getty Images
Bitcoin It plummeted on Thursday when a major stock sell-off in the US scared the cryptocurrency market.
Bitcoin fell more than 8% to $ 36,251.50 on Friday around 4:03 am ET, according to data from CoinDesk. Bitcoin dipped below $ 36,000 on Thursday before reducing some of these losses.
About $ 129 billion in value was wiped out of the cryptocurrency market over a 24-hour period starting at 4:03 am ET, according to data from CoinMarketCap.
The cryptocurrency sale was triggered by a painful day on Wall Street, where the The Dow Jones Industrial Average lost more than 1,000 points Thursday, marking the worst one-day drop since 2020.
Heavy technology Nasdaq it fell by almost 5%. Bitcoin has remained correlated with equity markets with cryptocurrency falling or rising in tandem with equities.
“Overall, global markets have been spooked by growth fears, as we can see. The Dow has experienced its worst decline since 2020 and all related risky assets have followed suit, including cryptocurrencies,” Vijay Ayyar, Vice President of the corporate and international development of cryptocurrency exchange Luno, told CNBC.
The US Federal Reserve raised its benchmark on Wednesday interest rate of half a percentage point. Further hikes in interest rates and tightening of monetary policy have sparked fears that the The US economy could go into recession.
Ayyar said bitcoin “lost a key level” when it dropped below $ 37,500, which could indicate “a much lower move” in the coming days. He said bitcoin could test a low of $ 30,000 soon and if the price drops below, it could drop to $ 25,000.
“However, in the meantime we may see some relief rallies, but nothing that indicates a change in sentiment” unless bitcoin is able to find market support above $ 42,000, Ayyar added.