Bitcoin (BTCUSD) Briefly Plummets Below $50,000 as U.S. Economic Fears Spread the Market Rout

Bitcoin ETFs, altcoins, crypto-related stocks tumble as the stock market began to crumble Friday.

Bitcoin (BTCUSD) fell sharply on Monday, briefly dropping below the key $50,000 level for the first time since February. The broader market sell-off, driven by U.S. economic growth concerns, pushed bitcoin to its lowest level in months.

Bitcoin's sharp decline also triggered a wave of liquidations in the cryptocurrency market, with over $1.2 billion in positions liquidated over the past 24 hours, according to data from Coinglass. Of the total liquidations, nearly 70% were long positions.

The sell-off in bitcoin comes as the stock market sell-off continued into Monday, with the Dow Jones Industrial Average opening down over 700 points. Surging inflation and slowing economic growth have battered markets in recent months, with bitcoin's performance closely tracking the broader market.

Bitcoin ETFs, Altcoins, Crypto-Related Stocks Fall

As the stock market fell on Friday, a net outflow of $237.4 million was observed from spot bitcoin exchange-traded funds (ETFs) over the past seven days, according to data from Farside Investors.

In line with past trends during crypto price declines, alternative crypto assets fell even more sharply than bitcoin. Ether (ETHUSD) fell 24% over the past week, while Solana (SOLUSD) dropped 28%.

Among crypto-related stocks, a double blow of selling pressure hit the stocks from both the stock and crypto markets. Shares of MicroStrategy (MSTR), among the largest corporate holders of bitcoin, fell 9%, while Block (SQ) and Coinbase (COIN) both declined 2% and 5%, respectively.

Bitcoin miner stocks also saw declines, with Cleanspark (CLSK) down 11%, Hut 8 (HUT) lower by 7%, Marathon Digital (MARA) declining 5%, and Riot Platforms (RIOT) down 3%.

Bitcoin Drawdowns a Common Occurrence

During bull markets following halving events, like the one that took place in April, it's not uncommon for bitcoin to experience multiple large price drawdowns. Despite bitcoin's aspiration to serve as a safe-haven asset, its recent performance aligns with its classification as a risk-on asset during periods of global market uncertainty, as indicated by its tendency to follow the broader market.

However, some long-term bitcoin bulls remain unfazed by the short-term volatility.

"People smash the sell button for liquid assets during broad-based panics," wrote Bitwise CIO Matt Hougan in an X post. "But from where I sit, today's events play into the long-term story for bitcoin."

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