Bitcoin (BTC) fell below $40,000 for the first time in two weeks, putting a damper on recent hopes among some digital-asset traders that the cryptocurrency might be poised to rally.
The price had already tumbled 7.3% on Thursday, the steepest losses in four weeks as the Dow Jones Industrial Average had its worst day of 2022. A modest decline this morning pushed bitcoin down to as low as $39,700. The price quickly rebounded to $40,700 but has since fallen below the $40,000 mark again.
Analysts cited the continuing conflict over Ukraine as weighing on sentiment, while traders in traditional markets are reckoning with the likelihood of aggressive Federal Reserve actions this year to tighten monetary conditions and tamp down inflation.
"Bitcoin has clearly lost its function as a defensive asset lately, showing almost no correlation with gold, which was in high demand on Wednesday and Thursday," Alex Kuptsikevich, senior financial analyst at FxPro, said in an email to CoinDesk Thursday.
In traditional markets, the S&P 500, the Nasdaq was down 1.3% and the Dow fell about 0.5% after starting the day flat.
UPDATE (Feb. 18 16:18 UTC): Updated with latest price action.
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