Bitcoin in bear market territory as it falls below the $95,000 mark

After soaring to its all-time high of US$126,251 on October 6 this year, Bitcoin price dropped to US$93,684 early Monday morning, down more than 25.8 per cent in 41 days.

By 10 AM UAE time, the world’s largest cryptocurrency by market value had recovered to US$95,171.

Etherium, the second-largest cryptocurrency, which was at US$4,687.77 on October 6, was last traded at $3,180.77, a drop of 32.14 per cent.

Since the peak in early October, the crypto market capitalisation has fallen by more than $1 trillion, or 24 per cent.

Experts believe a broad sell-off in risk assets deepened amid fading hopes that the Federal Reserve will cut US interest rates at its upcoming policy meeting.

There was a dip in the stock market as well, with S&P 500 down nearly 0.76 per cent for the week to 6,734.11, and the Nasdaq Composite down 1.95 per cent to 22,900.59. Gold, often considered the safest asset at times of volatility, was up 1.81 per cent to $4,073.76/oz.

“Bitcoin and crypto have generally enjoyed a positive correlation with good times in equities, so it has not become an asset of alternative value to hedge against fear in other sectors,” Juan Perez, director of trading at Monex USA told Reuters.

“If there is no enthusiasm toward risk-taking, it seems like that also translates into hesitation with bitcoin and the like.”

Dave Rosenberg, founder and president of Rosenberg Research, said bitcoin was in “official bear market terrain, having declined by more than 20 per cent in barely more than a month.” He also pointed to huge redemptions at exchange-traded funds, totalling US$870 million on Thursday alone.