The Bitcoin (CRYPTO: BTC) price fell hard overnight, down more than 7% at one point.
At the time of writing, one Bitcoin is worth US$39,546 (AU$53,221), down 6% from this time yesterday.
And it's not just the Bitcoin price that's sliding.
Those losses now see both the Bitcoin price and Ethereum down more than 15% over the past week.
So, what's going on?
Why is the Bitcoin price tumbling?
The Bitcoin price – indeed, almost the entirety of the crypto market, save stablecoins – is taking a thrashing alongside global risk assets.
The tech-heavy Nasdaq Composite (NASDAQ: .IXIC), as one example, fell 2.2% yesterday (overnight Aussie time), taking its five-day losses to 7.2%.
Commenting on Bitcoin's recent woes, eToro's market analyst and crypto expert Simon Peters said:
The moves down underpin what has emerged as a significant trend in 2022 – that cryptoassets don't appear immune to rate hike environments. Moving to a similar beat to traditional stock markets such as the Nasdaq 100, crypto appears to be struggling under an increasing rate environment.
Teong Hng, CEO of Satori Research, pointed to hawkish moves by the world's most-watched central bank, the US Federal Reserve, throwing up headwinds for cryptos and the Bitcoin price.
According to Teong (quoted by Bloomberg): "Fed tightening by 0.5 percentage point steps at upcoming meetings as well as $95 billion per month balance sheet run-off sent crypto markets spiraling lower."
Addressing why most of the altcoins (which are any tokens aside from Bitcoin) are down significantly more than the Bitcoin price, Josh Olszewicz, head of research at crypto investment firm Valkyrie, added: "Historically, altcoins have a tendency to overperform bitcoin to the downside in strong bearish trading environments. Altcoin trading participants often have less longer-term conviction."
What can turn things around?
Crypto investors had been hoping that the Bitcoin 2022 conference in the US state of Florida last week would help boost the Bitcoin price.
But that didn't eventuate.
"The Bitcoin 2022 conference held in Miami last week saw a slew of pronouncements on the crypto asset and the space more broadly, but unlike in past years, nothing of serious note seems to have buoyed the price this time around," Peters said.
If you're looking for a signal as to when the Bitcoin price might run hot again, Antoni Trenchev, managing partner of crypto lender Nexo, says to keep an eye on the US$45,000 level.
According to Trenchev (quoted by Bloomberg): "The Nasdaq 100 closed below its 50-day moving average on Friday, so now wouldn't be a bad time for Bitcoin to break its correlation with the tech-laden index. Close above $45,000 again and we're back in the game."