Bitcoin slid to its lowest level in 20 months, breaching the $60,000 support threshold that traders have watched closely for two years. The cryptocurrency fell as much as 5.4 percent to $59,023.11 on Wednesday, marking its weakest point since October 2024. This decline reflects deteriorating risk appetite across global markets.

A deepening sell-off in large tech stocks has pressured the world's largest cryptocurrency, as investors bet the Federal Reserve will raise rates to combat inflation. Higher borrowing costs typically force investors to reassess stretched valuations and seek safer assets. The S&P 500 dropped 0.3 percent while the Nasdaq Composite fell 0.8 percent during Wednesday afternoon trading, putting Wall Street on track for a three-day losing streak.

Asian markets also whipsawed, with chipmakers like Samsung Electronics and SK Hynix suffering from reduced appetite for riskier assets. Bitcoin and Solana have dropped 32 and 47 percent this year respectively, failing to recover even during equity rallies. Gerry O'Shea of Hashdex noted that weak sentiment reflects investors favoring AI stocks over cryptocurrencies.

Meanwhile, the Clarity Act governing digital assets has stalled in the Senate amid opposition from banks. US capital markets are processing SpaceX's landmark public offering, with OpenAI and Anthropic expected to follow. Without regulatory clarity or major catalysts on the horizon, crypto's correlation with traditional markets continues breaking down.