Bitcoin fell sharply after a sell-off of major U.S. stock indices. Bitcoin has been correlated closely to the price movement of the Nasdaq index.
Luke MacGregor | Bloomberg | Getty Images
Bitcoin hovered below the $36,000 level Friday morning, after a major stock sell-off in the U.S. Thursday spooked the cryptocurrency market.
The cryptocurrency was down less than 1% on Friday at $35,900.25, according to Coin Metrics, and ether fell 1.1%. Bitcoin has lost about 9% over the past 24 hours.
The selling of cryptocurrency was sparked by a painful day on Wall Street where the Dow Jones Industrial Average lost more than 1,000 points on Thursday and the tech-heavy Nasdaq fell 5%. Both losses marked the worst single-day drops since 2020. Bitcoin has remained correlated to equity markets.
On Wednesday, the U.S. Federal Reserve raised its benchmark interest rate by half a percentage point. Further interest rate hikes and tightening of monetary policy have sparked fears that the U.S. economy could go into a recession.
Bitcoin lost a key level when it fell below $37,500, which could indicates a move lower over the next few days, according to Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno. He said the next stop down is $30,000, but if bitcoin doesn’t hold there it could drop to $25,000.