Bitcoin dropped below the $29,000 level as a recent sell-off in the cryptocurrency space continues.
Cryptocurrencies fell with stocks after the Bureau of Labor Statistics reported consumer prices for the month of April jumped 8.3%, which was slightly higher than expected by economists polled by Dow Jones.
That spooked investors, leading them to exit risk assets including crypto. Cryptocurrencies remain highly correlated with the S&P 500 and, more recently, the Nasdaq Composite.
“The crypto market has been under pressure for some time now,” said Michael Rinko, venture associate at AscendEx. “The Fed keeps hiking, so equities keep going down and crypto’s been going down along with it. Generally that’s created a lot of fear in the market.”
This is the second time this week bitcoin has fallen into the $29,000 range. Analysts have called $30,000 a key level for the largest cryptocurrency by market cap, and said it could fall even further if it can’t hold there.
This time last week bitcoin touched a recent high of $40,000 but quickly reversed the next day and has been steadily hitting new lows since.
Investors also digesting big news from the Terra project, whose suddenly popular stablecoin TerraUSD crashed almost 100% at one point in the past week, breaking its $1 peg. The decentralized, algorithmic stablecoin is meant to be backed by a combination of digital assets, including bitcoin.