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Crypto: Bitcoin falls towards $30,000. Investors highlight support at $28,800, eye the stock market for further downside

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Bitcoin extended losses on Monday, trading at the lowest level since July 2021, as its correlation with the stock market climbs to historic highs while the S&P 500
SPX,
-2.01%

slides to a 13-month low

The cryptocurrency
BTCUSD,
-6.82%

plunged to as low as $32,072 Monday, more than 50% lower from its all time high of $68,990 in November, according to CoinDesk data. It is trading at around $32,359, down 5.9% over the past 24 hours. 

Crypto investors are closely watching stock performance for any bottom signals, as bitcoin and growth stocks have been trading in tandem lately.  The 30-day rolling correlation between bitcoin and the tech-focused Nasdaq 100
NDX,
-2.50%

hit an all-time high of 0.8 on Monday, according to crypto data provider Kaiko Research.

“We still believe there is risk for additional downside pressure in stocks that could open a deeper correction in the price of bitcoin,” Joel Kruger, market strategist at LMAX Group said. The next support level stands at $28,800, a low the crypto reached in June 2021, according to Kruger. 

Read: Still no stock-market bottom signal from VIX volatility gauge, market watchers say

However, “once we get down into the $20,000s we believe the narrative will start to shift and bitcoin will be very well supported even if stocks continue to decline, given the more promising longer-term fundamentals and unique value proposition of bitcoin,” Kruger noted. 

The range of $28,000 to $32,000 could be “a good region to add to long term holdings from a risk-reward perspective,” Marcus Sotiriou, analyst at the UK-based digital asset broker GlobalBlock, wrote in Monday notes. 

Meanwhile, the Coinbase
COIN,
-14.85%

premium gap, which measures the difference of bitcoin price between Coinbase Pro and Binance, has moved into deeper negative territory, according to crypto data platform CryptoQuant. 

The latest trend indicates that “some selling pressure may be coming from large and institutional investors,” as Coinbase is considered a gateway for institutional investors, Jan Wüstenfeld, analyst at Quantum Economics, told MarketWatch. 

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