After plunging below the key $20,000 level over the weekend, a strategist atUBS said that the token's slide is causing sentiment in the market to sour.
James Malcolm told Insider on Monday that the collaborative spirit that has been so prevalent in the market is giving way to an "every man for himself" attitude which is likely to cause more trouble.
The price of the digital currency plunged as low as $17,660 over the weekend. On Sunday and Monday, the world's biggest coin recovered some of its lost value and was up slightly to $20,620. There is an hour and a half later.
As the Federal Reserve hikes interest rates hard and the global economy slows, investors are dumping investments seen as riskier.
Many investors look at the $20,000 price as important. A drop to below levels seen five years ago is a major blow to the thesis that bitcoin is on a solidly upward path.
We've broken big-figure levels and that has been critical. Malcolm said that sentiment soured the further down we went.
The recent turbulence at investment firms was a sign of the high levels of stress in the market, according to him.
The Financial Times reported that Three Arrows failed to meet demands by its lenders to stump up more cash last week.
Malcolm said that there's a narrative out there that says that there's a lot of collaboration between the two finances. It's clear that it's sort of every man for himself now.
He said that the outlook forcryptocurrencies was not good, but that a stabilization of the financial markets could bring some calm.
It's hard to think that we're out of the woods for a lot of reasons. The regulatory element has yet to bite in any shape or form.
He said that low trading volumes would make weekends difficult. There are many things that suggest that prices can stay soft.
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