Bitcoin Plunge Wipes $110 Billion From Crypto Markets
Broad sell-off hits digital assets and crypto-linked stocks as investors weigh geopolitical risks and await Fed guidance.
A sharp sell-off in Bitcoin triggered a brutal Tuesday for the cryptocurrency sector, erasing an estimated $110 billion in total market value and sending a ripple of losses across crypto-related stocks.
The world's largest digital currency fell 5.3%, decisively breaking below its 50-day moving average, a key technical indicator that often signals a potential shift in short-term momentum. The move intensified concerns that recent bullish sentiment in the digital asset space is waning.
The downturn was not isolated to Bitcoin. Other major cryptocurrencies, or altcoins, also saw significant declines, with Ethereum dropping 4.5% and Cardano tumbling more than 6%. The broad-based selling coincided with weakness in the wider equity markets, particularly in the technology sector, as the Nasdaq 100 posted its worst performance in over two weeks.
Investors attributed the pullback to a confluence of factors creating a 'risk-off' environment. Increased geopolitical uncertainty, coupled with investor caution ahead of a key speech from Federal Reserve Chair Jerome Powell on interest rates, prompted traders to shed more speculative assets.
Companies with business models tied to the crypto market felt the immediate impact. Shares in Bitcoin miner Bitfarms Inc., for example, slid more than 7% as the drop in digital asset prices fueled concerns about the firm's near-term profitability.