Bitcoin falls below $40,000 for the first time in five months
The most valuable cryptocurrency fell 7.4% to $38,261, while second-placed Ether fell below $3,000 for the first time
Cryptocurrencies fell sharply on Friday, with Bitcoin hitting its lowest level in almost five months as risk aversion returned to global markets.
The most valuable cryptocurrency fell 7.4% to $38,261, while second-placed Ether fell below $3,000 for the first time. According to CoinMarketCap data, digital currencies have lost $1 trillion in value since their peak in November.
In a letter, Fundstrat Digital Asset Research strategists Sean Farrell and Will McEvoy said, "Bitcoin and the broader crypto market remain subject to the whims of macro variables."
The threat of stricter monetary policy in the United States has prompted a retreat in speculative investments, which has been symbolised by virtual coins. With the Nasdaq 100 sliding into a correction on Thursday, Bitcoin has recently mirrored fluctuations in technology companies, which have been under pressure.
Binance Coin, Cardano, and Solana were among the other cryptocurrencies that fell in value.
A technical pattern based on the weekly relative strength index, a momentum indicator, suggested that Bitcoin's downturn might be due for a break. The indicator fell into a territory on Friday that had previously followed floors in Bitcoin selloffs.
Bitcoin's price has surged in recent years, owing in part to contentious narratives about institutional adoption and its potential role as a portfolio hedge. Some of those assertions have been debunked by its gyrations during a difficult period for world markets.
Bitcoin has increased by more than fourfold in the last two years, but it has lost around $30,000 since reaching a record high of nearly $69,000 in November.
