Bitcoin dropped more than 10% on Monday, dipping below $31,000 after touching a recent high of $40,000 last week.
The price of bitcoin was last down 10.6% at $30,914.84, according to Coin Metrics. The cryptocurrency is at its weakest point since last July when Bitcoin traded as low as $29,839.80 – the last time bitcoin traded below $30,000. It’s about 53% from its all-time high, which it hit in November. Ether fell 10.4% to $2,295.43.
Cryptocurrencies have been steadily extending their declines since Thursday, when they fell sharply amid a broader stock market sell-off, in which the Dow Jones Industrial Average and Nasdaq Composite posted their worst single-day drops since 2020. Losses steepened over the weekend. Crypto trades 24 hours a day, including weekends.
The crypto market, led by bitcoin, has remained highly correlated with the moves in equities, particularly tech stocks, for about a year. All three of the major stock indexes were lower on Monday.
“Bitcoin has followed the lead of the equity market, extending lower after a weak April,” said Katie Stockton, founder of Fairlead Strategies. “Short-term momentum has deteriorated … and bitcoin is no longer oversold from a short-term perspective.”
Stockton also said bitcoin currently has no counter-trend signals but that the equity market looks poised to rebound this week, which could carry over to cryptocurrencies.
Key U.S. inflation data for the month of April, due to be released Wednesday, could be a temporary “turning point” for bitcoin, according to Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange Bitbank.
“If the CPI shows no sign of slowing down, it will add to the fear of faster monetary tightening,” Hasegawa said. “But other inflation metrics are starting to slow down and the April CPI could follow suit, which in turn will likely alleviate the market’s concern and help recover its risk sentiment.”
It wouldn’t be enough to completely reverse market sentiment, however, he said.
Bitcoin needs to maintain the key psychological level of $33,000 to prevent further deterioration of technical sentiment, Hasegawa added. He sees it trading between $30,000 and $38,000 this week.
Correction: This story’s headline was updated to reflect that the price of bitcoin dropped below $33,000 Monday morning. A previous headline misstated the day’s lowest price.