It was another ugly plunge in cryptos with Bitcoin breaking back below $32,000 for the first time since July 2021.
This follows Bitcoin’s first six-week losing-streak since 2014. Ethereum has however been holding up relative to Bitcoin.
Overall, Risk assets continued to move in tandem since last week’s FOMC statement, and bitcoin’s rolling correlation with the tech-focused Nasdaq 100 just hit a historically high level of 0.8.
It is now nearing its traditionally strong correlation to Ethereum which is also on the rise and currently hovers around 0.9.
However, despite being strongly correlated with the Nasdaq 100, Bitcoin has been performing slightly better since the start of the year as when inflation expectations are increasing, Bitcoin tends to outperform tech stocks.
“With Bitcoin now having retraced all the way down [below $32k], trader sentiment has fallen to six week lows,” research firm Santiment commented on the situation:
“We typically prefer to see capitulation signs like this, as weak hands leaving the space is generally what is needed for a truly notable bounce.”
Currently, as @OnChainCollege details in a recent tweet, over 40% of the Bitcoin supply is being held at a loss, and this is the highest proportion since April 2020, just after the COVID-19 crash.