Representations of cryptocurrency Bitcoin are seen in this illustration taken Nov. 25, 2024.
Dado Ruvic | Reuters
Bitcoin wavered as investors continued to shed their speculative technology holdings with the cryptocurrency first among them.
Bitcoin was last trading up 1.6% at $93,236.00, but earlier Tuesday touched $89,259, its lowest since April 22. Bitcoin is up 2% over the past year, according to Coin Metrics.
The move comes as investors have shed their AI-related tech holdings this month in the stock market. Bitcoin appeared to foreshadow the risk-off move, peaking in early October at a record above $126,000 and sliding ever since.
Bitcoin, YTD
The tech-heavy Nasdaq 100 stock index is off by 4.5% this month, following cryptocurrencies lower. Many large tech investors are also big holders in the cryptocurrency space.
Mike O’Rourke, chief market strategist at Jones Trading said the correlation between bitcoin and the tech-stock sell-off this week “is undeniable.”
“It is truly the tail wagging the dog when a $1.8 trillion market cap speculative asset is significantly influencing the $32 trillion market capitalization index,” said O’Rourke. “It is alarming to see the index — with its highly concentrated exposure to the largest and most influential companies in the world and the U.S. equity market — take cues from bitcoin.”
But while bitcoin’s continued sell-off has left some experts concerned, it serves an important purpose — clearing leveraged positions and setting up the token for its next runup, according to Willem Schroé, CEO of bitcoin layer-2 network Botanix Labs.
“Bitcoin’s brief falling under $90,000 doesn’t change the bigger picture,” Schroé said. “Each cycle has these 20% to 30% pullbacks to clear leverage. Historically, those periods have been the foundation for the next major [bull] run.”