Bitcoin (BTC) has entered a correction defined as a decline of 10% or more from recent highs.
The price of Bitcoin, the largest cryptocurrency by market capitalization, dipped below $113,000 U.S. over the past 24 hours and is currently trading right around $113,500 U.S. per digital token.
That’s 10% below the $124,000 U.S. all-time high BTC reached earlier in August as investors clamoured to buy crypto.
However, investors appear to have suddenly turned risk averse, sending the price of Bitcoin and other cryptocurrencies sharply lower in recent trading days.
Ethereum (ETH), the second largest cryptocurrency, has fallen about 4% in the last day and is now trading around $4,100 U.S. after nearly breaking above $5,000 U.S. in July.
Investors have been selling crypto and technology stocks as concerns grow about valuations and the path forward for interest rates.
Following some troubling recent economic data, doubts are rising about whether the U.S. Federal Reserve will lower interest rates in this year’s second half.
At the same time, many high-flying artificial intelligence (A.I.) stocks are now selling off after seeing their share price more than double this year.
Stocks of cryptocurrency firms have been caught up in the current selling, with shares of Strategy (MSTR) and Coinbase Global (COIN) each falling more than 5% on Aug. 19.
Despite the current pullback, Bitcoin is still up 22% this year.
