Monday, May 9, as of 3:30 PM EST, Bitcoin drops over a five-day period landing at a low of $30,523. This is less than half of its peak value of $69,000 in November last year.
It appears that Bitcoin’s rising streak has come to a halt as the cryptocurrency value falls to the lowest level since July 2021. Today’s event breaks the “bullish” trend line it carried for the first few months of 2022.
Bitcoin hovered between the $35,000 to $46,000 range before beginning its downward trend on Friday.
Edul Patel, Chief Executive Officer of Mudrex, an algorithm-based crypto investment platform, told Bloomberg, “The downward trend is likely to continue for the next few days.” He also noted that Bitcoin could test the $30,000 level.
Furthermore, the recent downward trend is not only seen with Bitcoin. The second-largest cryptocurrency, Ethereum, also fell by more than 5% down to $2,304.
Investors reacting to Bitcoin dropping
According to data compiled by Bloomberg, Bitcoin’s 40-day correlation with the S&P 500 stock benchmark at a record 0.82, any shock that would cause investors to pull back will result in dragging Bitcoin and other riskier tech stocks down even further.
Lucas Outumuro, Head of Research at IntoTheBlock, told Fortune last week that “until the market starts looking past the impact that [quantitative tightening] and raising rates will have, I find it difficult for Bitcoin to establish a broader uptrend.”
The recent rise in inflation is causing many investors to take a low-risk approach. This has resulted in them selling stocks and crypto to reduce risk.