Bitcoin led a decline for digital assets across the crypto spectrum, with the world’s largest token posting an eighth consecutive weekly loss in its longest decline since August 2011.

Bitcoin fell 2.4% on Friday to around $28,700 at 5 p.m. m. in New York, hit by both the macroeconomic headwinds of the Fed’s monetary tightening and the crypto-specific fallout from this month’s implosion of algorithmic stablecoin TerraUSD, which continues to weigh on digital markets. assets, particularly those related to decentralized finance. In total, the crypto market has lost some $500 billion in market value so far in May, a drop of 29%.

For a second day, cryptocurrencies declined even as risky assets like stocks surged, marking a break from their recent close relationship, and a sign of shaky conviction that could herald a worrying trend.

The market swoon “took a lot of confidence out of the asset class,” Matt Maley, chief market strategist at Miller Tabak + Co., said by email. “So, as investors get a little more confident in the markets in general, they look to other areas to buy because of the weakness. They don’t want to get burned on crypto again.”

Ether, the second-largest cryptocurrency, and other altcoins tied to popular DeFi projects like Avalanche and Solana were among the biggest drops, down between 4% and 6% on Friday. And in the non-fungible token market, even popular collections like Bored Ape Yacht Club and CryptoPunks are under pressure, market data shows. Meanwhile, short interest in the first US Bitcoin futures-backed exchange-traded fund is near the highest since the fund’s inception in October 2021, as investors increase bearish bets.

With reverberations from the Terra crash hitting altcoins harder, Bitcoin now claims a larger share of the cryptosphere, accounting for 44% of the total market value. That is the most since October, just before the last bull market peaked, according to data from CoinGecko.

But it’s not that Bitcoin has been spared: It is now down almost 60% from its all-time high in November, though it has generally traded in a range of $28,000 to $30,000 over the past two weeks.

The largest cryptocurrency remains below its 20-, 50-, and 200-day moving averages. “With every moving average currently sloping lower, it is the epitome of a downtrend,” said Frank Cappelleri, a trading desk strategist at Instinet.

There is no doubt that the strong correlation between cryptocurrencies and other risky assets has been broken recently. As tech stocks in the US rebound after weeks of stagnation, digital assets have largely remained on the sidelines, Fiona Cincotta, senior market analyst at City Index, said by email.

“This is far from the decoupling that Bitcoin bulls were looking for,” Cincotta said. “I doubt this is the end of the positive Bitcoin-Nasdaq correlation. However, the concern is that Bitcoin can only track the Nasdaq when it falls.”

A move below $28,000 would be significant to continue the downtrend and test the year’s low of $25,425, Cincotta said. Beyond this, $20,000 is the next psychological level that comes into play. On the other hand, buyers will look for a move above $31,500 for a breakout to the upside and any chance of a recovery in price, he added.