Bitcoin falls below $81,500 as tech stock sell-off spreads to Asia

Bitcoin slides as Wall Street losses hit Asian markets

Bitcoin fell below $81,500 on Thursday night, losing 3.4% of its value in the past 24 hours. This decline tracked a broader sell-off in the crypto market, which dropped by 3% overall. The movement happened amid weak earnings from technology companies and rising tensions between nations.

The drop in cryptocurrency prices coincided with a sharp fall in U.S. stock markets. The sell-off then extended to Asian trading sessions on Friday morning, with key equity indices in South Korea and Japan also posting losses.

Key numbers from the sell-off

• Bitcoin traded at $81,387, down 3.4% from the previous day.
• Ethereum, a major digital currency, dropped 3.5% to $2,388.
• The Nasdaq Composite closed down 2.6%, marking its worst performance since June.
• The S&P 500 index fell 1.21%, its lowest daily drop since July.
• Total crypto liquidations, which are forced trades when investors lose money, reached $440.9 million in 24 hours.

Equity market reactions

Investors pulled back from technology stocks in the U.S. due to concerns over artificial intelligence spending and recent company results. Major tech firms saw significant declines: Meta Platforms slipped 6.98%, Micron Technology dropped 6.26%, and Nvidia fell 4.4%. Advanced Micro Devices was down 8.1%.

This risk-averse mood spread to Asia on Friday. South Korea's Kospi index lost 2.3% during morning trading, while Japan's Nikkei 225 dropped 1.6%. These moves suggest that uncertainty in the traditional stock market is directly influencing digital asset prices.

What analysts say

Market experts describe the situation as a shift toward caution. Dominick John, an analyst at Zeus Research, stated that crypto is facing pressure from weak tech earnings and geopolitical tensions, specifically involving the U.S. and Iran. He noted that these factors are making investors more defensive.

Rick Maeda of Laevitas explained that crypto is currently trading like a high-risk technology stock. He identified AI financing, particularly regarding Meta, as the main driver of the recent sell-off. Dan Khus from LVRG Research said traders are watching to see if $80,000 holds up as a support level for Bitcoin and if volatility in stocks or oil extends the decline.

What happens next

Market participants are waiting for the release of the S&P Global Flash U.S. Manufacturing PMI report. This data measures factory activity and can influence expectations for economic growth and interest rate cuts. The outcome of this report, along with the persistence of buying or selling in Bitcoin ETFs, will determine if the current pullback continues.

Source

• The Block