Bitcoin and other cryptocurrency prices fell on Friday due to a general market decline and problems within the digital asset sector. U.S. employment data released on Friday is expected to be the main reason for the additional drop.
The largest cryptocurrency, Bitcoin, fell to its lowest price since mid-January, losing 8% on the last day to $19,825. Bitcoin’s significant rally in early 2023, which saw it rise from $16,500 to $25,000 in a few weeks, raising hopes of a new bull market, could lose its gains.
“There has been nothing but negative headlines for Bitcoin and crypto this week,” said Yuya Hasegawa, an analyst at broker Oanda. “There is just little reason to buy Bitcoin now as the market is saturated with negative developments, not just specifically for the crypto industry, but also for the wider financial market as well.”
The latest push for cryptocurrencies to fall was the losses in the stock market, with which Bitcoin is highly correlated. The Dow Jones Industrial Average and S&P 500 industrial indices fell on Thursday and were poised for further declines on Friday after massive losses at SVB Financial (SIVB) triggered a wave of sell-offs in bank stocks, undermining broader sentiment.
This vital labor market indicator is expected to be a deciding factor for the U.S. Federal Reserve’s next rate decision later this month amid concerns over rising interest rates, which have recently been reflected in both stocks and cryptocurrencies. With February employment data expected at 8:30 a.m. ET, it could be much more unpredictable. Statistics that turn out to be hotter than anticipated could support bets that the Fed will raise interest rates by 50 basis points on March 22, which could lead to additional selling.
Outside Bitcoin, the second-largest cryptocurrency, Ether, fell 9% to $1,390. Smaller cryptos or altcoins suffered the most, with Cardano falling 4.5% and Polygon falling 8%. Memecoins were even worse off, with Dogecoin down 11% and Shiba Inu down 10%.