Bitcoin drops to hit lowest level since July after stock sell-off

Bitcoin continued to slip after a broader stock sell-off in the U.S. last week sent the cryptocurrency market into a frenzy and prompted the cryptocurrency to plummet by roughly 10%.

Bitcoin, the world's largest digital currency by market value, was down 5% to $32,860.91 at round 7:12 a.m. ET, in accordance with information from Coindesk.

Bitcoin hit a intra-day low of $32,650.02, its lowest degree since July 2021. The virtual forex has been buying and selling in a narrow vary this yr as it attempts to reclaim its highs of late 2021.

It is now down more than 50% from its peak price of $68,990.90 in November 2021.

The drop comes after the blue-chip Dow Jones Industrial Average misplaced greater than 1,000 points on Thursday and the Nasdaq plunged by 5%. Those losses marked the worst single-day drops since 2020. The Dow and Nasdaq fell again on Friday.

In the meantime, the Federal Reserve on Wednesday raised its benchmark interest rate by half a proportion point in response to inflation pressures.

The inventory market rallied after Fed chair Jerome Powell mentioned a bigger rate hike of 75 foundation points is not being thought of. However by Thursday, buyers had erased the Fed rally's good points.

"Overall markets stay underneath pressure from inflation and progress fears," stated Vijay Ayyar, vp of company improvement and worldwide at crypto change Luno.

He stated that if bitcoin falls below $30,000, it might even drop additional to $25,000 earlier than any "significant" move again up.

The worldwide market cap for cryptocurrencies was at $1.68 trillion on Sunday, based on knowledge from CoinGecko.com, and cryptocurrency trading volume in the final day was at $119 billion.

Crypto traders have been additionally on edge over the weekend after the TerraUSD stablecoin briefly misplaced its greenback peg.

A stablecoin is a digital currency designed to peg its worth to real-world assets. Issuers of stablecoins typically back their virtual currencies with different belongings held in reserves. On this case, TerraUSD goals to be pegged to the U.S. greenback.

The Luna Foundation Guard, which is behind TerraUSD, has been buying up giant quantities of bitcoin in its reserves.

However, the value of TerraUSD briefly slipped away from parity with the U.S. dollar over the weekend earlier than recovering. This has sparked fears that the Luna Basis Guard could sell bitcoin to prop up TerraUSD.

"The crypto markets are also a bit nervous after UST (Terra stablecoin) misplaced its peg briefly over the weekend," Ayyar mentioned.

—CNBC's Tanaya Macheel contributed to this report.