Bitcoin witnessed a sharp decline in value following a substantial sell-off in major U.S. stock indices, highlighting its close correlation with Nasdaq's price movements. The cryptocurrency plummeted by as much as 6% early on Friday, momentarily dipping just above its critical support level of $80,000, as investors shifted their assets from riskier investments to more secure options.
At around 7:30 a.m. ET, Bitcoin, the largest cryptocurrency by market capitalization, reached a low of $80,548, marking its lowest point since April 11. This significant fall highlights an ongoing downward trend in Bitcoin's value, exacerbated by widespread liquidations in highly leveraged crypto positions observed in October.
Citi analyst Alex Saunders commented on Friday, "Price action has been unimpressive across the large tokens, with BTC dipping below the year-start price as long-time and larger holders of the token have become more active." He added that, "ETF flows, the main driver of BTC prices, are also drying up, adding to the short-term performance worries."
Despite the decline, Bitcoin has since recuperated some of its losses, trading down 4% at $82,939.59, according to data from Coin Metrics. The cryptocurrency has experienced a 12% decrease since the start of the week and roughly a 26% drop over the past month.