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Bitcoin (BTC-USD) and ethereum (ETH-USD), the two largest cryptocurrencies by market cap, got knocked lower in Friday late morning trading as the broader stock market gaps down after a week of further disappointing housing data.
Specifically, bitcoin (BTC-USD) has dropped 8.5% to $21.46K as of shortly before 12:00 p.m. ET, reaching the lowest level since the end of July. Ether (ETH-USD), which has easily outpaced bitcoin in the past month, as seen in this chart, slid 9.2% to $1.70K.
The global crypto market cap declined 8.1% to $1.03T, according to data from CoinMarketCap.
“There was not an independent catalyst which led to the heavy selling pressure, but the S&P 500 rejecting and failing to continue its recovery contributed to Bitcoin’s drop,” Marcus Sotiriou, an analyst at digital asset broker GlobalBlock, wrote in a note.
Indeed, investors seem to be shying away from risk assets as all three major stock indices took a beating, with Dow Jones (DJI) -0.8%, S&P 500 (SP500) -1.3% and Nasdaq (COMP.IND) -2%.
On a purely technical basis, “Bitcoin broke a key upwards-sloping trendline (which dates back to the bottom in June), indicating a significant move to the downside was imminent from a technical perspective,” Sotiriou noted.
Looking at the popular crypto fear & greed index, sentiment in the emerging space is certainly poor amid mounting recession fears and a Fed that will only stop tightening financial conditions until inflation gets brought down meaningfully. The index is standing at 33, signaling fear, down from 42 from last week, but up slightly from 31 a month before.
Looking ahead, SA contributor Bitfreedom Research contended that bitcoin (BTC-USD) can fall by 60% to 80% more due to tighter monetary policy, increased regulatory scrutiny, pending insolvencies as well as the spread of Monkeypox.
Some other digital tokens experiencing intense selling pressure intraday include: binance coin (BNB-USD) -7.2%, ripple (XRP-USD) -10.7%, cardano (ADA-USD) -13.5%, solana (SOL-USD) -10.5%, dogecoin (DOGE-USD) -14.7% and polkadot (DOT-USD) -11.6%.
Earlier, bitcoin falls toward $21K, pulling down Hut 8, Marathon Digital, Riot shares.