Bitcoin has recently experienced a significant downturn, declining over 4% to around $85,000 as a collective risk-off sentiment permeated global markets. This drop occurred in tandem with declines in equities, particularly in the tech sector, as well as a notable reversal in gold prices.
How are global stock markets impacting Bitcoin? The S&P 500 saw a decline of more than 1%, while the Nasdaq fell by over 1.8%. A steep fall in Microsoft shares, which dropped nearly 11% following its earnings report, contributed significantly to the adverse market conditions. The negative trend affected other major tech stocks as well; Tesla fell by approximately 2%, Google dipped around 2.5%, and Nvidia decreased about 1.5%.
What about precious metals like gold? Gold, which hit a historic high of $5,500 on Wednesday, saw a dramatic shift, plummeting nearly 5% to around $5,100 as investors scaled back their asset exposure due to mounting uncertainties across various investment avenues.
In the cryptocurrency sector, the impact of the selloff was evident. Liquidations escalated to over $360 million within a short time, primarily affecting long positions according to Coinglass data. This meant that roughly $350 million was lost in long liquidations, while short positions accounted for about $10 million. Over the past 24 hours, total liquidations approached $700 million.
What’s happening with other cryptocurrencies? Bitcoin's decline was mirrored by other major tokens. Ether fell approximately 6%, nearing $2,800, while Solana decreased about 5% to roughly $118. XRP also witnessed a decline of about 5%, dropping to around $1.80. The interconnectedness of these markets suggests that investor sentiment is currently leaning towards caution, impacting not just Bitcoin but the broader landscape of cryptocurrencies.