For HODLers of crypto, the last couple months have been quite the test of endurance.
The selloff in cryptocurrencies gained momentum on Monday, with Bitcoin tumbling to a six-month low and other digital tokens seeing even bigger losses.
Bitcoin sank as much as 6.6% and fell below the $34,000 mark, continuing a six-day downturn. Ether retreated 7.6% and touched $2,201, also the lowest since July.
Across the crypto spectrum, markets were in a sea of red with Solana’s SOL and Cardano’s ADA plummeting 19% and 13%, respectively, according to data compiled by CoinGecko.
Crypto has come under widespread selling pressure in recent days, with traders pointing to hawkish signals from the Federal Reserve and a selloff in technology shares as reasons for traders to withdraw from risky assets. Since its all-time high in November, Bitcoin has tumbled more than 50%.
“We don’t think it is a bad thing if market volatility takes some of the air out of the more speculative corners of the market,” said strategists led by Mark Haefele, chief investment officer at UBS Global Wealth Management.
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.
Meanwhile diversification may also be a factor in Bitcoin’s slump. Traders are “going to other alt coins that people are betting … are going to be the key rivals that take on Ethereum as far as becoming the next big blockchain,”