Bitcoin fell below its 200-day moving average on Friday, as investors remain worried that global interest rates will stay high for longer while economy may slow down.
The cryptocurrency
BTCUSD,
saw a sudden drop of more than 7% over the past 24 hours, after observing a muted trading volume and decreased volatility for several months. The coin fell to as low as $25,392 on Thursday.
Bitcoin gained 60% so far this year, but is still down over 60% from its all-time high in 2021, according to CoinDesk data.
The next important support level to watch is $25,200, according to Katie Stockton, founder and managing partner of Fairlead Strategies. The secondary support for bitcoin stands at around $20,600, Stockton said.
The low trading volume and muffled volatility for the past several months have rendered bitcoin vulnerable to being pushed around by large trades, according to James Butterfill, head of research at CoinShares.
Bitcoin’s fall was driven by large liquidations of perpetual futures on options exchanges Deribit and OKX, analysts at QCP Capital wrote in a Friday note.
Still, timing-wise, some attributed the trigger for the move to an article in The Wall Street Journal on Thursday saying that SpaceX wrote down the value of bitcoin it owned by a total of $373 million in 2022 and 2021, and had sold the cryptocurrency.
From the macroeconomic perspective, yield on the 10-year Treasury note
BX:TMUBMUSD10Y
on Thursday reached its highest level in almost 16 years, as investors are worried that global central banks may keep interest rates at elevated levels for longer.
High interest rates typically make risky investments, such as crypto, less appealing.
“Bitcoin has often been the first to act in recent years, so this may be indicative of a broader crash in other asset classes,” wrote Butterfill.
U.S. stocks traded mostly lower on Friday, with the Dow Jones Industrial Average
DJIA
unchanged. The S&P 500
SPX
dipped 0.1% and the Nasdaq Composite
COMP
fell 0.3%, according to FactSet data.
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