Cryptocurrencies fell sharply on Friday, with Bitcoin and Ether reaching multi-month lows amid growing market concerns. Investors are wary of high tech valuations and fading expectations of near-term Federal Reserve policy easing.
Bitcoin, the world’s largest cryptocurrency, dropped 2.1%, falling below $86,000 to a seven-month low of $85,350.75 in Asian trading. Ether also slid more than 2%, hitting $2,777.39, its lowest in four months. Both tokens face weekly losses of roughly 8%.
Market analysts say the sharp decline in cryptocurrencies reflects fragile investor sentiment. Bitcoin and Ether are often seen as indicators of risk appetite, and the recent market volatility shows caution returning to global financial markets.
About $1.2 trillion has been wiped off the total value of all cryptocurrencies in the past six weeks, according to CoinGecko. Hong Kong-listed spot bitcoin ETFs launched by China AMC, Harvest, and Bosera fell nearly 7% each on Friday.
The fall comes after a strong run this year, when Bitcoin surged to a record high above $120,000 in October, boosted by favourable global crypto regulations. However, a major crash last month triggered panic selling, low liquidity, and $19 billion in liquidations across leveraged positions.
Tony Sycamore, a market analyst at IG, said the market feels “dislocated, fractured, and broken” since the recent selloff. Bitcoin has erased all year-to-date gains and is now down 8% for the year, while Ether has lost about 16%.
The selloff has also impacted crypto-focused companies. Shares of Strategy, known for corporate Bitcoin accumulation, fell 11% in a week, hitting one-year lows. Japanese peer Metaplanet has tumbled nearly 80% from its June peak.
Digital asset research firm CryptoQuant noted in its weekly report that market conditions for Bitcoin are the “most bearish since the current bull cycle started in January 2023.” Analysts warn that the demand wave for cryptocurrencies this cycle may have already passed, indicating continued volatility ahead.
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