Bitcoin gives up August gains as risk-off sentiment takes hold

Bitcoin (BTC-USD) and ethereum (ETH-USD), the two largest cryptocurrencies by market cap, got knocked lower in Friday midafternoon trading as the broader stock market gaps down after a week of further disappointing housing data. Specifically, bitcoin (BTC-USD) has dropped 8.5% to $21.46K as of shortly before 12:00 p.m. ET, reaching the lowest level since the end of July. Ether (ETH-USD), which has easily outpaced bitcoin in the past month, as seen in this chart, slid 9.2% to $1.70K. The global crypto market cap declined 8.1% to $1.03T, according to data from CoinMarketCap. "There was not an independent catalyst which led to the heavy selling pressure, but the S&P 500 rejecting and failing to continue its recovery contributed to Bitcoin’s drop," Marcus Sotiriou, an analyst at digital asset broker GlobalBlock, wrote in a note. Indeed, investors seem to be shying away from risk assets as all three major stock indices take a beating, with Dow Jones (DJI) -0.8%, S&P 500 (SP500) -1.3% and Nasdaq (COMP.IND) -2%. On a purely technical basis, "Bitcoin broke a key upwards-sloping trendline (which dates back to the bottom in June), indicating a significant move to the downside was imminent from a technical perspective," Sotiriou noted. Looking at the popular crypto fear & greed index, sentiment in the emerging space is certainly poor amid mounting recession fears and a Fed that will only stop tightening financial conditions u...