- Bitcoin was back below the $4,000 level Friday morning.
- The sell-off has “largely been mirroring” what is going on in the stock market recently, according to an analyst.
- Bitcoin was down 80% from its all-time high.
- Watch bitcoin trade live.
Bitcoin was hammered back below the $4,000 level early Friday.
The biggest cryptocurrency by market value fell as much as 7.55% to a low of $3,867. It was lower for a second straight session, and has all but wiped out Wednesday’s gain of more than 10% – its biggest daily advance since April.
“The crypto markets have largely been mirroring what we’ve been seeing from equities lately,” said Mati Greenspan, senior market analyst at eToro. “It seems that investors are simply more averse to risk than they have been over the last few years. This is likely the result of monetary tightening by global central banks.”
It has been a difficult year for bitcoin investors, who last year saw prices skyrocket by more than 2,000% to nearly $20,000 a coin. Bitcoin topped out in December and have been in a downward spiral ever since.
Prices had been stuck in a range between $6,000 and $8,000 since the middle of May, but the cryptocurrencty came under significant pressure in the middle of November. That’s when technical selling pushed bitcoin’s price down to a low of $3,522, its weakest since September 2017 and down more than 80% from its peak.
“For bitcoin, we’ve now seen a bounce off the first support level of $3,500,” Greenspan said. “We could end up testing this level again over the weekend.”
He added: “The key level of support resides at $3,000 per coin. This psychological level played a significant role in the bull run of 2017 and so will be watched closely in the coming days.”