As the global market selloff spreads, cryptocurrencies were not left out as Bitcoin and other altcoins have also had their fair share of the market’s downtime.
On Saturday, bitcoin values hit levels not seen since August, as a selloff in risky assets spread to cryptocurrencies. Bitcoin has already lost more than half of its value since its November high.
Bitcoin BTCUSD, -4.31 percent dropped to $34,042.78 on Saturday, a 7.2 percent decrease, before recovering. Other digital assets have also fallen in value, with Ethereum ETHUSD -6.85% down 12 percent. According to Coinbase, Solana and Cardano have both dropped by at least 17 percent.
Stocks selloff might be a reason for the dip
The drops came after a tumultuous session on Wall Street on Friday, which saw stocks swing from early gains to a selloff as investors repeated this week’s pattern of selling rallies, sending the Nasdaq Composite COMP, -2.72 percent deeper into correction territory.
In a message to customers, Naeem Aslam, chief market analyst at AvaTrade, stated, “Pessimism continues to develop among investors and traders when it comes to riskier assets, and this is primarily influencing the price of shares and bitcoin.”
“The thing with bitcoin is that when it starts to fall, the price action lowers like there’s no tomorrow,” Aslam said, adding that January has historically been a turbulent month for the cryptocurrency.
Aslam also mentioned a suggestion made by Russia’s central bank on Thursday to prohibit cryptocurrency use and mining. Russia is one of the world’s most popular bitcoin mining places, and it has now joined China in banning the activity.
In a Friday briefing, Katie Stockton, managing director of Fairlead Strategies, a technical analysis firm, stated, “Many altcoins are into support at their midsummer 2021 lows, making it crucial that bitcoin holds support as it sets the tone for the cryptocurrency sector.” Stockton predicts a continuing breakdown below current BTC price levels with a 30%-70 percent possibility.
