Bitcoin (BTC) fell below the key support level of $80,000 U.S. to start the trading week as cryptocurrencies remain under pressure from volatile equity markets.
The largest cryptocurrency by market capitalization dropped nearly 2% to about $79,800 U.S. early on Oct. 26 as investors continue to rotate out of risk assets and seek safety.
Traders on Wall Street also appear to be cutting their risk exposure ahead of the U.S. Federal Reserve’s Oct. 28 meeting where the central bank could raise interest rates.
Higher interest rates make borrowing more expensive and tend to pull money out of riskier assets such as crypto.
Digital assets remain under pressure due to a combination of worries that include artificial intelligence (A.I.) investments, rising interest rates, inflation, and the Nov. 3 midterm elections.
Other cryptocurrencies also continue to fall, including Ethereum (ETH), which dropped nearly 3% to $2,300 U.S. early on Oct. 26.
In Asia, markets are being roiled on the day by a continued selloff in stocks tied to the A.I. trade. South Korea’s leading Kospi index, is down 1%.
Microchip stocks were the biggest losers on Japan’s Nikkei index as investors weigh the risks of an A.I. bubble forming.
There are also growing concerns about energy prices after crude oil prices got as high as $116 U.S. per barrel in recent days.
Analysts say that Bitcoin’s price needs to get back above $82,500 U.S. for the rally that began in late August of this year to continue.
Breaking below the key support level of $80,000 U.S. is seen as a negative for the digital asset.
