Bitcoin saw a plummet on Wednesday, losing a vital support floor and catalyzing colossal liquidation of the cryptocurrency marketplace. The crypto’s recent slump seems directly tied to the crash in US tech stocks.
The previous 24 hours saw Bitcoin losing 5% of its value, changing hands near $38.5K at this publication. On the other part, NASDAQ 100 lost approximately 4% on Tuesday. The stock’s fall emerged as market players feared economic slowdowns that might injure earnings.
BTC-NASDAQ Correlation Surges as Tech Stocks Plunge
Bitcoin experienced downtrends as the tech stocks space saw losses. The crypto has reacted exceedingly like US stocks in 2022. Bloomberg data shows BTC – US tech stocks correlation touched record highs early in April.
Bitcoin’s vulnerability to macro factors like monetary policies and inflation make the crypto act more like stocks. Such a reaction cost the crypto’s potential as a haven. Nevertheless, Bitcoin briefly outshines most leading tech stocks in 2022.
The Bitcoin – stocks correlation has maintained upticks this year, and that isn’t a lucrative environment for cryptocurrencies’ success. Non-existent correlations tend to signal bulls run to boast a higher probability of unveiling.
The latest slump in NASDAQ came as investors feared reduced earnings from leading tech firms. Google’s Alphabet lost 4% while missing quarterly earnings. Moreover, investors dumped Microsoft stocks ahead of earnings, following the bell, though the firm edged past investors’ expectations.
Tesla also contributed to the slump with its 12% slump amid fears that executive Musk could trim some holdings to supply his Twitter acquisition.
Massive Liquidation within the Crypto Space
The overall crypto space also seemed to crash with the stock market. Latest declines within the market had long positions worth $290 million closed over the previous 24hrs, the highest in more than two weeks.
Bitcoin experienced liquidations of 109 million, whereas Ethereum’s positions stood at $88 million. Coinglass data shows most investors expected further upticks due to the Monday crypto markets bounce. Long positions accounted for 86% of the liquidations.
While publishing this post, the global market cap of all crypto assets stood at $1.80 trillion, following a 3.62% drop within the previous day.
Stay around for upcoming market updates.