Bitcoin has lost nearly 10% of its value in the past 24 hours, dropping below $30,000 for the first time since July 2021. One analyst fears the biggest cryptocurrency could be worse.
BTC’s drop on Tuesday is more than 55 percent below its November 2017 high of $69,000. YTD Bitcoin price is down 34%.
YTD Bitcoin price is down 34%. TradingView data showed that the world’s most sought-after crypto asset fell to $29870.30 around 8 PM ET.
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Stock-related bitcoin drop
The traditional financial and cryptocurrency markets saw a sell-off as a result of the Federal Reserve’s strong monetary tightening and recession fears.
The last time the largest cryptocurrency by market cap fell below $30,000 was on July 20, 2021, when it reached $2,301 before rebounding.
As institutions have joined the bitcoin and cryptocurrency markets over the past year, their correlation with stock prices has grown. As a result, Wall Street is having a tough day as technology stocks continue to face a major selloff. The Nasdaq fell 4.3%.
BTC total market cap at $594 billion on the daily chart | Source: TradingView.com
Analyst Sees BTC Drop
Bitcoin “may be receiving a small bounce around $35,000, but unless we break the trend line at around $37,000, I expect $29,000 in the coming weeks or week,” crypto analyst Wendy O says in a new social media video.
Several cryptocurrency investors have suggested that Bitcoin is the digital age version of gold, a potential investment in the transition to safety and an inflation hedge.
However, the behavior of cryptocurrency prices indicates that the market does not view these highly volatile assets as reliable stores of value in times of economic instability.
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The cryptocurrency market is feeling tight for weeks
Similar to the stock market, the cryptocurrency market has been under pressure for weeks as investors grapple with persistently rising inflation, the ongoing downward spiral of economic events increasingly caused by Russia’s invasion of Ukraine, and tighter US monetary policy by the Federal Reserve.
“Bitcoin’s long-term fundamentals are intact, but a recovery to record levels will take a very long time. Bitcoin will begin to stabilize when the carnage on Wall Street ends, and many investors are still panic-sold at the moment,” said Edward Moya, chief market analyst. in Oanda.
The central bank raised interest rates by 50 basis points last week and pledged to reduce its holdings. Instead of buying bonds to stimulate the economy, they will be disposed of to fight inflation.
Cryptocurrency values are very volatile. Experts say this is something cryptocurrency investors will continue to struggle with.
Featured image Pexels, chart from TradingView.com