Bitcoin and cryptocurrency prices are trending downward, following U.S. stocks lower after their biggest loss since June 2020.
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The bitcoin price has once more fallen under the closely-watched $30,000 per bitcoin level, down almost 5% over the last 25 hours. Other top ten cryptocurrencies, including ethereum, BNB, XRP, solana, cardano avalanche, dogecoin and polkadot, have seen steeper declines, with the ethereum rivals all losing around 10%.
As bitcoin and crypto traders come to terms with the huge price crash that's wiped $1 trillion from the combined crypto market since April, fears are mounting that more pain could be on the way if stock market contagion spreads.
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"The market clearly remains in a state of fear, caused by the de-pegging of [collapsed stablecoin] UST, as well as fear spillover from the broader financial markets," Sam Kopelman, the U.K. manager of bitcoin and crypto exchange Luno, said via email.
On Wednesday, all major U.S. markets fell sharply, with the S&P closing down 4%, its largest fall since June 2020, and the tech-heavy Nasdaq losing 4.7%. In recent weeks, crypto market watchers have highlighted bitcoin's close proximity to the stock market, with the Federal Reserve interest rate hikes and balance sheet trimming squeezing investors across the board.
"Current fear in crypto markets is pushing capital that was previously invested in altcoins into bitcoin—a mark of the coin’s relative strength in comparison to others," Kopelman added.
Ethereum, its biggest rivals solana, cardano, avalanche, and polkadot, as well as the meme-based dogecoin and Ripple's XRP, have all declined at a faster pace than bitcoin in recent weeks.
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"[The] panic sell-off in the markets and the persistence of investor anxiety heralds the approach of a panic peak," Alex Kuptsikevich, FxPro senior market analyst, wrote in emailed comments, adding the bitcoin price could fall as low as $20,000 if the crypto crash continues.
"The overall negative market sentiment has prevented the bulls from turning out in full force. So far, it isn’t easy to see reliable signs of oversold or rebound formation. We should be prepared for the cryptocurrency market to test support at last week’s lows again in the near term. We consider the area near $20,000 the final target for a potential selloff, which corresponds to bitcoin’s long-term support line."