As the selloff accelerates, the Bitcoin collapse is ’not done yet.’ Hammers for risk aversion cryptocurrencies, stocks

<p>Bitcoin fell more than 10% to below $40,000 on Friday, with the rest of the cryptocurrency market following suit as risk aversion triggered a downdraft for markets ahead of the Federal Reserve's widely anticipated interest rate hike.</p> <p>With Russia's intention to prohibit crypto assets lighting the fire for the latest drop, Bitcoin's price movements have become inextricably linked to technology shares, which have plunged on rate rise worries. The Nasdaq fell deeper into correction territory on Friday after Netflix stunned investors with weaker-than-expected subscriber growth.</p> <p>Bitcoin has been "struck by another wave of risk aversion in the markets," according to Oanda analyst Craig Erlam, falling below a critical level of technical resistance near $40,000, where bulls and bears had struggled for days.</p> <p>Separately, cryptocurrency exchange Kraken placed the bear case for Bitcoin at $26,300. Kraken said in its 2022 cryptocurrency market intelligence report that the crypto market as a general isn't likely to do as well this year as it did last, when Bitcoin soared to a record of almost $67,000.</p> <p>Ethereum (ETH), one of the hottest digital coin trades that has skyrocketed in popularity because to the non-fungible token (NFT) bubble, has dropped more than 12% and now trades below $3,000. Other smart contract layer-1 coins like as Cardano (ADA), Terra (LUNA), Polkadot (DOT), and Solana (SOL) all fell by double digits in intraday trade.</p> <p>"Greater rate hikes would generally generate more pain for risk-on assets, and Bitcoin in particular," said Chris Matta, president of 3iQ Digital Assets US. The leading digital coin generally benefits from expansionary monetary policy, but it is presently being pummelling by forecasts of a more hawkish Fed.</p> <p>According to Matta, even though Bitcoin is still viewed as an inflationary hedge by some investors, the Fed's move to kerb inflation "isn't going to place it at the top of the list" of many crypto investors.</p> <p>Regulatory uncertainties,