As the Cryptocurrency market continues with its volatility, investors move cautiously with their investment decisions. Today, Bitcoin has sunk below its key support level of $40,000 mark. This downfall has impacted the whole Cryptocurrency space.
This price action has resulted in the global cryptocurrency market cap plunging by 3.41% over the last 24hrs positioned at $1.80 trillion.
Bitcoin In Correlation With Nasdaq
Bitcoin has declined by more than 3% in the past 24hrs trading just above the $39,000 level. On the other hand, the Nasdaq 100 index has plunged by nearly 4% yesterday as investors are worried about an economic slowdown that will impact earnings.
The losses that Tech stocks have acquired have been smashed on Bitcoin too. As per data from Bloomberg, the correlation between Bitcoin and U.S tech stocks has hit a record high earlier this month.
Bitcoin is too sensitive towards macro factors such as inflation and monetary policy which push Bitcoin to behave more in line with stocks. Yet the world’s first cryptocurrency by market cap has outperformed most major technology stocks this year.
With the fears of weak earnings that could happen from major technology firms, The Nasdaq too saw a decline. Alphabet, Google’s owner saw a downfall of 4% due to its skipped quarterly earnings, and also Microsoft shares were discarded by investors. Even Tesla shares were decreased by 12% with a fear that Tesla CEO Elon Musk might sell a few of his holdings in order to buy Twitter.
Liquidation Affects The Crypto Market
Meanwhile, it’s just not Bitcoin, but the whole crypto market is affected by the decline of major technology firms. The market witnessed a $290 million loss in long positions which closed in the last 24hrs and this stands as the highest in over two weeks.
Bitcoin experienced $109 million in liquidations whereas Ethereum saw a liquidation of $88 million.
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Source: https://coinpedia.org/bitcoin/this-is-the-reason-why-bitcoin-btc-price-is-hovering-below-40k/