Bitcoin declined below $65,000, finding support near $63,000, according to Alex Kuptsikevich of FxPro. The cryptocurrency's weakness mirrors recent declines in the stock market, as investor risk sentiment has shifted amid expectations of interest rate cuts from the Federal Reserve.
Bitcoin Plunges Amidst Global Market Turmoil, Raising Concerns Over Extended Sell-Off
In a worrisome development, the cryptocurrency market has witnessed a significant downturn, led by a sharp decline in Bitcoin's value. Bitcoin plummeted below the crucial $65,000 support level on Tuesday night, triggering concerns among investors and analysts. This sell-off has been accompanied by a parallel decline in global stock markets, highlighting the growing correlation between cryptocurrencies and the broader financial landscape.
"Technically, this sink looks like an invitation for a deeper dive," warned Alex Kuptsikevich, an analyst at broker FxPro. "The inability of Bitcoin to mount a sustained rebound raises the specter of further losses. Should the sell-off intensify, we will be closely monitoring its capacity to remain above $63,000."
The weakness in Bitcoin has coincided with a pullback in U.S. equities, with both the Dow Jones Industrial Average and S&P 500 Index posting declines from their recent all-time highs. This synchronized downturn underscores the growing sensitivity of cryptocurrencies to investor risk sentiment, which has been dampened this week by shifting expectations regarding the Federal Reserve's interest rate policy.
"Cryptocurrencies have sold off in tandem with other risk assets," observed Kuptsikevich. "The rise in U.S. Treasury yields to their highest levels in months has weighed heavily on investor appetite for risky investments. As a result, markets are tempering their expectations for aggressive Fed easing this year in the wake of strong economic data."
Beyond Bitcoin, the downturn has also impacted other major cryptocurrencies. Ether, the second-largest crypto by market capitalization, experienced a moderate decline of less than 1% to $3,330. Smaller tokens, such as Cardano and Polygon, remained largely stable, with gains of less than 1% each. In contrast, memecoins, exemplified by Dogecoin and Shiba Inu, bucked the trend, posting gains of 1% and 3%, respectively.
As investors navigate this volatile market, concerns are mounting over the potential for an extended sell-off. The inability of Bitcoin to regain its footing above $65,000 has raised questions about its immediate prospects. The correlation between cryptocurrencies and traditional markets further amplifies these concerns, as continued turmoil in the broader financial landscape could exacerbate the downturn in the crypto space.
"The market's reaction to this sell-off will be closely watched in the coming days," said Kuptsikevich. "A sustained decline below $63,000 would be a significant technical development, potentially attracting additional selling pressure. Conversely, a recovery above $65,000 could stabilize sentiment and set the stage for a potential rebound."
