Bitcoin drops to hit lowest stage since July after stock sell-off

Bitcoin continued to slide after a broader inventory sell-off in the U.S. last week sent the cryptocurrency market right into a frenzy and prompted the cryptocurrency to plummet by roughly 10%.

Bitcoin, the world's largest digital forex by market worth, was down 5% to $32,860.91 at round 7:12 a.m. ET, in response to information from Coindesk.

Bitcoin hit a intra-day low of $32,650.02, its lowest degree since July 2021. The digital currency has been buying and selling in a slender vary this year as it makes an attempt to reclaim its highs of late 2021.

It is now down more than 50% from its peak worth of $68,990.90 in November 2021.

The drop comes after the blue-chip Dow Jones Industrial Average lost greater than 1,000 points on Thursday and the Nasdaq plunged by 5%. Those losses marked the worst single-day drops since 2020. The Dow and Nasdaq fell once more on Friday.

Meanwhile, the Federal Reserve on Wednesday raised its benchmark interest rate by half a share point in response to inflation pressures.

The inventory market rallied after Fed chair Jerome Powell mentioned a larger fee hike of 75 basis points is not being thought of. However by Thursday, investors had erased the Fed rally's positive aspects.

"Overall markets stay beneath pressure from inflation and growth fears," said Vijay Ayyar, vice president of corporate development and worldwide at crypto exchange Luno.

He said that if bitcoin falls under $30,000, it may even drop further to $25,000 earlier than any "significant" transfer back up.

The global market cap for cryptocurrencies was at $1.68 trillion on Sunday, based on data from CoinGecko.com, and cryptocurrency trading volume in the last day was at $119 billion.

Crypto traders have been also on edge over the weekend after the TerraUSD stablecoin briefly lost its greenback peg.

A stablecoin is a digital currency designed to peg its worth to real-world assets. Issuers of stablecoins typically back their digital currencies with other assets held in reserves. On this case, TerraUSD aims to be pegged to the U.S. dollar.

The Luna Basis Guard, which is behind TerraUSD, has been buying up giant amounts of bitcoin in its reserves.

However, the value of TerraUSD briefly slipped away from parity with the U.S. dollar over the weekend earlier than recovering. This has sparked fears that the Luna Basis Guard could promote bitcoin to prop up TerraUSD.

"The crypto markets are additionally a bit nervous after UST (Terra stablecoin) lost its peg briefly over the weekend," Ayyar said.

—CNBC's Tanaya Macheel contributed to this report.