Bitcoin and ether tumbled to multi-month lows on Friday as investors pulled back from riskier assets amid concerns over stretched tech valuations and fading expectations of near-term US rate cuts, Reuters reported. Bitcoin, the world’s largest cryptocurrency, dropped 5.5% to a seven-month low of $81,668, while ether slid more than 6% to $2,661.37, hitting a four-month low.Both tokens have fallen roughly 12% this week, erasing Bitcoin’s year-to-date gains and pulling ether nearly 19% lower for the year.The sell-off comes as volatility spikes across equity markets, particularly high-flying artificial intelligence stocks. Analysts said the retreat signals a broader shift away from speculative assets. “If it’s telling a story about risk sentiment as a whole, then things could start to get really, really ugly, and that’s the concern now,” said Tony Sycamore, market analyst at IG, according to Reuters.$1.2 trillion crypto value wiped outThe market value of all cryptocurrencies has dropped by about $1.2 trillion in six weeks, CoinGecko data showed. Shares of Hong Kong-listed spot bitcoin ETFs from China AMC, Harvest and Bosera fell close to 7% on Friday.Bitcoin’s fall follows a rally earlier this year that pushed it above $120,000 in October, driven by favourable regulatory developments. However, analysts say last month’s record one-day crash — which triggered $19 billion in liquidations — has left sentiment fragile. “The market feels a little bit dislocated, a bit fractured, a bit broken,” Sycamore said, quoted Reuters.Citi analyst Alex Saunders noted that $80,000 is a key level because it is close to the average purchase price of ETF-held bitcoin.Corporate crypto holdings under pressureThe downturn has dragged crypto-linked stocks lower. Strategy, once seen as a flagship corporate bitcoin accumulator, has fallen 11% this week and traded near one-year lows, Reuters said. JP Morgan warned the firm could be removed from some MSCI equity indices, potentially forcing index-linked funds to sell.Japan-based Metaplanet has plunged about 80% from its June peak, while crypto exchange Coinbase is on track for its longest losing streak in over a month. Miners MARA Holdings and CleanSpark dropped 2.4% and 3.6%, respectively, and newly listed Gemini has sunk 62% from its debut.Digital asset research firm CryptoQuant said conditions were deteriorating sharply. “Bitcoin market conditions are the most bearish they have been since the current bull cycle started in January 2023,” it said, adding that “we are highly likely to have seen most of this cycle’s demand wave pass.”
