The recent downturn in the crypto market and the slide in stock prices is part of a broader risk-off sentiment driven by several macroeconomic factors.
The Bitcoin and stock market continued their volatile slide as investors moved sharply from volatile assets such as crypto and AI stocks.
However, the Dow dropped 499 points, or 1.07 percent, while the S&P fell 0.83 percent and the Nasdaq slid 1.21 percent.
Bitcoin has been at the top position: just weeks after achieving a record above $126,000, the cryptocurrency has fallen more than 26 percent and erased all of its gains for the year.
The drop significantly pushed bitcoin under $90,000 for the first time in seven months before it rallied modestly on Monday night.
Meanwhile, concerns over whether the Federal reserve will cut interest rates next month and concerns over the high valuations of prominent tech companies have led to widespread selling.
In this connection, Haider Rafique of OKX said, “Bitcoin’s pullback is part of a broader shift in risk sentiment.”
Concerning the situation, tech stocks have been facing extreme pressure.
Nvidia fell 2.81 percent Tuesday, Amazon stumbled 4.43 percent, and Microsoft dropped 2.7 percent.
The Nasdaq has lost approximately $2.6 trillion in market value since reaching a record high in October.
According to analysts, this may be an optional time for bitcoin investment.
How the market behaves over the next few days will determine if this is a rebound or just a sharp, temporary dip.
Ryan Rasmussen of Bitwise Asset Management said, “Some investors see sideways churn and get spooked.” It is the perfect opportunity to build on existing positions.”
Nonetheless, the situation is best understood as a global de-risking event where the global stock market’s decline signals distrust in high valuations, while the crypto market’s meltdown is the highly accelerated version of that same fear.
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