Bitcoin continued its steep fall into Monday after a rough weekend, dropping 5.2% over the past 24 hours to $32,940 at 7 a.m. ET. This marks the fifth consecutive down day for Bitcoin, sending its market price to less than half of what it was at its all-time high of $69,000 in November.
The fall isn’t exclusive to Bitcoin. Ethereum, the second-largest crypto, also fell by 5% from the start of the weekend to $2,440.
Since Friday, Bitcoin has broken below its three-month rising trend line, falling out of the $35,000 to $46,000 range it has bounced between in the first few months of 2022. Analysts are now indicating the fall in prices could be the start of a new market trend, as Bitcoin’s valuation approaches the lowest level it has seen since July 2021.
Edul Patel, chief executive officer of Mudrex, an algorithm-based crypto investment platform, told Bloomberg, “The downward trend is likely to continue for the next few days,” he said, noting Bitcoin could test the $30,000 level.
July 2021 lows
As institutional and professional investors moved past cryptocurrency’s volatile nature and began to dominate the market, prices of Bitcoin and other cryptocurrencies have increasingly begun to move in tandem with the market.
With Bitcoin’s 40-day correlation with the S&P 500 benchmark at a record 0.82, according to Bloomberg data, any shock that leads investors to retreat to safer corners of the market tends to hit riskier tech stocks and cryptocurrencies worse than other assets.
After the Federal Reserve indicated it would raise interest rates by half a percentage point on Thursday—the largest increase since 2000—to battle inflation, U.S. stock futures fell and government bond yields rose. European and Asian stocks also pulled back on Monday. The pan-European Stoxx 600 slipped by 1.5% by late morning and Japan’s benchmark Nikkei index fell by around 2.5%. The Nasdaq composite, a tech-heavy benchmark, closed below 1.4% on Friday, bringing its year-to-date fall to 23.3%.
Bitcoin’s price fall over the last few days completely reverses the bull run that saw its price reach $69,000 in November 2021.
Lucas Outumuro, head of research at IntoTheBlock, told Fortune last week that “until the market starts looking past the impact that [quantitative tightening] and raising rates will have, I find it difficult for Bitcoin to establish a broader uptrend.”
Darshan Bathija, chief executive of Singapore-based crypto exchange Vauld, said to Bloomberg, “In light of fears of rising inflation, most investors have taken a risk-off approach—selling stocks and cryptos alike in order to cut down risk.”