Bitcoin Dips Below $64K as U.S. Equity Selloff Stalls Crypto Rebound

Cryptocurrencies sharply reversed early gains in the U.S. trading session on Wednesday, with bitcoin {{BTC}} falling below $64,000 amid a broad market stock sell-off that has affected the digital asset market.

The leading cryptocurrency by market cap fell 2% to $63,890 in an hour after trading above $66,000 earlier in the session. At press time, BTC was trading at $64,000, down 0.5% in the past 24 hours.

Altcoin majors like Solana {{SOL}}, cardano {{ADA}}, and Chainlink’s token {{LINK}} have sold off by 2%-4% in the same time frame. The broad market crypto benchmark CoinDesk 20 Index (CD20) is down 1.2% in the past 24 hours, with most components in the red.

Cryptocurrency majors down 2%-3% in an hour (CoinDesk)

The action comes as major U.S. stock indexes have also been selling off, with the tech-heavy Nasdaq down 2.7% and the S&P 500 down 1.3%. Tech megacap stocks like chipmaker Nvidia (NVDA), which have been a major contributor to both indexes reaching all-time highs, have struggled over the past few days as investors have shifted capital to smaller-cap stocks in anticipation of more favorable interest rates later this year. Nvidia fell 6.5% on Wednesday but is still 145% higher since the beginning of the year.

Read more: Rotation from Mega-Cap US Stocks Could Provide Headwind for Cryptocurrencies, Marex Solutions Says

LMAX Group Market Strategist Joel Kruger said that the cryptocurrency rally could stall if the sell-off in the stock market turns into a deeper correction, but it could provide a haven for investors fleeing stocks in the longer term.

“The only concern we have been signaling in recent sessions has been our concern about the state of the U.S. equity market and the possibility that we could soon see a major downtrend reversal that would allow for a healthy correction,” Kruger said in a note on Wednesday.

“But even in that case, there will be plenty of reasons to want to buy Bitcoin as a safe haven asset, and plenty of reasons to want to buy other crypto assets that have less potential for major innovation,” he added.