Bitcoin experienced a significant drop in value following a sell-off in major U.S. stock indices, reflecting its close correlation with the Nasdaq index's movements.
Early Friday, Bitcoin plunged by as much as 6%, briefly nearing its crucial $80,000 support level as investors moved away from riskier assets towards more defensive ones.
The largest cryptocurrency by market capitalization hit a low of $80,548 around 7:30 a.m. ET, marking its lowest point since April 11. This decrease accentuates Bitcoin's decline after a series of forced liquidations of leveraged crypto positions in October.
"The price action has been underwhelming across major tokens, with BTC dropping below its starting price for the year as larger and longer-term holders become more active," noted Citi analyst Alex Saunders in a client report on Friday. "ETF flows, a primary driver of BTC prices, are also drying up, exacerbating short-term performance concerns."
Bitcoin has since recouped some of its losses, trading down 4% at $82,939.59 according to Coin Metrics. Nonetheless, the cryptocurrency has declined 12% since the start of the week and approximately 26% over the past month.