Bitcoin (BTC) drops below $36,000 amid broader market sell-off
Bitcoin fell sharply after a sell-off of major US stock indices. Bitcoin has been correlated closely to the price movement of the Nasdaq index.
Luke MacGregor | Bloomberg | Getty Images
Bitcoin hovered below the $36,000 level Friday morning, after a major stock sell-off in the US Thursday spooked the cryptocurrency market.
The cryptocurrency was down less than 1% on Friday at $35,900.25, according to Coin Metrics, and ether fell 1.1%. Bitcoin has lost about 9% over the past 24 hours.
The selling of cryptocurrency was sparked by a painful day on Wall Street where the Dow Jones Industrial Average lost more than 1,000 points on Thursday and the tech-heavy Nasdaq fell 5%. Both losses marked the worst single-day drops since 2020. Bitcoin has remained correlated to equity markets.
“Overall, global markets have been spooked by growth fears as we can see. The Dow had its worst drop since 2020, and all related risky-based assets followed suit including crypto,” Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, told CNBC.
On Wednesday, the US Federal Reserve raised its benchmark interest rate by half a percentage point. Further interest rate hikes and tightening of monetary policy have sparked fears that the US economy could go into a recession.
Ayyar said that bitcoin “lost a key level” when it fell below $37,500 and that could indicate “a move much lower” in the next few days. He said bitcoin could test a low of $30,000 soon and if the price falls below that, it could drop to $25,000.
“However, we could see some relief rallies in the meanwhile, but nothing to indicate a change in sentiment” unless bitcoin is able to find market support above $42,000, Ayyar added.