Waning sentiment on strong economic growth led to a second day of sell-offs in broader markets on Thursday morning. Asian markets slid after a day of red numbers in U.S. equity markets, leading to sell-offs in Bitcoin (BTC) and other major cryptocurrencies.
Bitcoin failed to regain support at $30,000 after falling below that level on Wednesday. The asset is hovering above $29,000, with support at $27,000 should it lose the current level.
Bitcoin's weakness spread to major cryptocurrencies, with Solana's SOL and Cardano's ADA losing as much as 9% in the last 24 hours, leading the losses. Traders likely retreated from major cryptocurrencies in anticipation of further declines in global markets.
Price movements in cryptocurrencies have recently followed those in the U.S., with Bitcoin trading similarly to a risky tech stock.
Ether (ETH) fell 4%, Polkadot's DOT dropped 7%, while Dogecoin (DOGE) declined 5%. Tron (TRX) gained 0.2% in nominal terms, while Polygon (MATIC) erased Wednesday's gains with a 9% plunge.
The market capitalization of cryptocurrencies fell 3% to less than $1.3 billion. The slide followed a slump in U.S. markets on Wednesday, as consumer goods company Target's (TGT) earnings reports missed estimates and shares of the retail giant plunged more than 22% in the United States.
As reported, inflation is forcing consumers to spend more on groceries and less on discretionary items, and Walmart (WMT) lowered its profit forecasts Wednesday, citing higher fuel and labor costs.
Weak gains in the U.S. spilled over into Asian trading, led by weakness in Chinese tech stocks. India's Sensex and Asia's Dow lost more than 2.2%, while futures on European indexes opened nearly 0.1% lower.
Chinese tech giant Tencent posted its lowest revenue gains since 2014, losing 8% on Thursday. Hong Kong's Hang Seng Tech Index fell 5.1% as analysts worried that the negative impact of the lockouts and reduced spending would eventually show up in earnings reports in Asia.
Weakness in global markets increased amid fears that spending would fall in coming years as the West raises interest rates and tightens monetary policy.
Federal Reserve Chairman Jerome Powell has pledged to tighten monetary conditions until inflation declines. Some crypto analysts expect a further correction in cryptocurrencies if current market conditions persist.