🔥Bitcoin falls below $40,000 for the first time since September as investors flee the market🔥

The price of bitcoin dropped to its lowest level since September on Monday, as increasing interest rates prompted investors to sell riskier, growth-oriented assets.

According to Coin Metrics, Bitcoin plummeted as much as 6% to a low of $39,771.91, recouping the majority of its losses. Around 4 p.m. ET, it was trading 1.3 percent down at $41,904.87. Ether, the second-largest cryptocurrency by market capitalization, recovered some of its losses as well. It fell as low as $2,940 in the morning and closed at $3,090.67, down 3.4 percent.

Following a week of choppy trading for equities, particularly momentum stocks, the cryptocurrency market has declined. Investors have been shifting towards more cyclical and value stocks as the 10-year US Treasury rate has risen to start 2022. After closing 2021 at 1.5 percent, the 10-year soared as high as 1.8 percent on Monday.

"Over the last six months, we've seen bitcoin act like a risk asset on multiple occasions," Noelle Acheson, head of market analytics at Genesis, said. "Bitcoin falls when the market is agitated. We've seen a number of signs that the 10-year yield increase has disturbed market sentiment —That's bad news for any asset with a high level of cash flow volatility. Unlike many other assets that have been tarnished by this brush, bitcoin is liquid and can withstand additional selling pressure without taking a significant impact."

After a heated inflation data that indicated the greatest surge in consumer prices in 30 years at the time, Bitcoin touched a record high near $69,000 in November. Investors flocked to inflation hedges like bitcoin and gold as a result of this news.

Because of the way bitcoin has moved in tandem with stocks, investors are more divided than ever on whether it is a good inflation hedge. Last week, Goldman Sachs predicted that bitcoin will eat into gold's market share and eventually reach $100,000.

However, since November, cryptocurrency values have been progressively falling, with bitcoin falling by about 40%. Last week, Bitcoin lost more ground as the Federal Reserve announced plans to start shrinking its balance sheet, in addition to the bond-tapering and interest-rate hikes that investors had anticipated.

"Right now, the crypto market appears to be following the wider macro situation," said Juthica Chou, head of over-the-counter options trading at Kraken. "This is most likely due to a rising overlapping institutional investor base, such as macro funds that allocate to crypto as well."

Bitcoin has been diverging from other crypto assets, according to Arca Chief Investment Officer Jeff Dorman, and its movements reflect more about the macro environment and equities than they do about decentralized finance, Ethereum-alternative protocols, NFTs and the metaverse, and other crypto sectors and altcoins.

"Bitcoin's market dynamics have shifted dramatically in the previous two years," he remarked. "It moved from being entirely crypto native to trading as a 24/7 levered VIX." It's far more significant to individuals who follow the S&P 500 and large Treasurys, as seen by price movement every day."

Cryptocurrency stocks were also down on Monday. Coinbase's stock dropped by around 3.2 percent. Silvergate and Signature, two crypto banks, lost 4% and 3%, respectively.