Home / Markets / Cryptocurrency /  Bitcoin tumbles to 6-month low, Ethereum falls 11%

Bitcoin, the largest cryptocurrency by market value, tumbled more than 7% on Monday to its lowest since July, as fears of a Russian attack on Ukraine sparked a sell-off of riskier assets.

Bitcoin was last trading down 6.8% at $33,820, taking losses from its all-time high of $69,000 hit in November past 50%.

Ethereum was down 11% to lowest since 29 July. It was trading last at $2,253.

Smaller cryptocurrencies, which tend to move in tandem with bitcoin, also slumped.

US-listed miners Riot Blockchain, Marathon Digital and Bit Digital slumped between 7.3% and 12% in premarket trading, while crypto exchange Coinbase Global dropped 7.8%.

Bitcoin is moving in tandem with stocks like never before as both slump, but that link-up could yet bring some respite for the largest cryptocurrency if shares stage a rebound.

The 40-day correlation coefficient for the digital token and the tech-heavy Nasdaq 100 has reached almost 0.66, the most in data compiled by Bloomberg since 2010. A similar correlation with the S&P 500 is at a record too.

Strategists including Ed Yardeni, president of Yardeni Research, are floating the idea that equity sentiment is due a snap back, setting the stage for a rebound in stocks after recent declines. Such a revival could bolster Bitcoin and other tokens, at least for a while.

“Stocks should recover over the coming months as bond markets stabilize and corporate earnings continue to expand thanks to a resurgent global economy," Peter Berezin, chief global strategist at BCA Research Inc., wrote in note. “This could give cryptos a temporary lift."

Cryptocurrencies have skidded on the prospect of a reduction in the Federal Reserve stimulus that buoyed speculative assets through the pandemic. More than $1 trillion has been erased from digital coins since a November high. Bitcoin resumed declines on Monday, falling 2.5% to $34,614 at 5:21 pm in Hong Kong.

Chris Weston, head of research with Pepperstone Financial Pty Ltd., said the sector is “grossly oversold but momentum is to the downside and rallies are likely to be sold."

BCA’s Berezin is skeptical about Bitcoin overall even as he sees the possibility of a short-term boost should stocks recover. His long-term target for it is just $5,000. Investors seeking to hedge risk should consider going long on Cardano, Solana and Polkadot versus Bitcoin, Litecoin, and Dogecoin, he said.

With agency inputs

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