Bitcoin broke below a key support level on Friday after a major stock sell-off in the U.S. Thursday spooked the cryptocurrency market and sent bitcoin tumbling about 10%.

Bitcoin fell less than 1% Friday to $35,917.98, according to Coin Metrics. Ether slid 1.1% to $2,683.64.

The moves follow a painful day on Wall Street in which the blue-chip Dow Jones Industrial Average lost more than 1,000 points on Thursday and the tech-heavy Nasdaq fell 5%. Both losses marked the worst single-day drops since 2020 and followed big rallies in the previous session. The Dow and Nasdaq fell again on Friday.

Bitcoin, whose price action remains highly correlated to stock market moves, has traded in a tight range all year as it struggles to reclaim its highs of late 2021 amid the broader market sell-off.

“That correlation will over time break down, you’ve already seen the beta the breakdown, i.e. [if] the Nasdaq falls 3% crypto doesn’t fall 9% like it would have last year,” Michael Novogratz, CEO of Galaxy Digital, told CNBC’s “Squawk Box Friday. “But I do think there’s more pain to come.”

Interest rate hikes and tightening of monetary policy have sparked fears that the U.S. economy could go into a recession. On Wednesday, the U.S. Federal Reserve raised its benchmark interest rate by half a percentage point, as expected.

The stock market rallied immediately afterward, amid comments by Fed chair Jerome Powell who said a bigger rate hike of 75 basis points isn’t currently under consideration. Nevertheless, by Thursday investors mentally prepared for increased tightening this year and erased all of the Fed rally’s gains.

“What’s different from 2008, different than 2001, different than the COVID crises, is the cavalry isn’t here. There’s no giant injection of liquidity to create the V-shape, we’re going to go down and then we’re going to grind until there’s a new story that shows up and then take back off again,” Novogratz said.

“It’s not going to be nearly as pleasant to plunge in and buy the low,” he added. “If you did that after Covid you looked like a hero eight weeks later. There’s not a lot of hero trades out there.”

Despite the fear and uncertainty in the market, interest by institutions and long-term holders in crypto remains strong.

“It’s amazing how much institutional capital is starting to line up come into the place,” Novogratz said. “BlackRock, Blackstone, Citadel, Apollo are all building major crypto efforts, and so it’s completely intuitive to me that there’s a backstop somewhere in crypto.”

The amount of bitcoin supply that hasn’t moved in at least a year has hit an all-time high, according to Will Clemente, lead insights analyst at Blockware Solutions. He also said long-term holder supply has also increased, despite their cost basis declining. That signals a supply transfer from top buyers to long term holders.

“With macro in the driver seat, fundamental Bitcoin analysis such as on-chain analysis has had less weighing in our market outlook currently,” he said. “However, with that in mind, beneath the surface fundamental investors have been sitting tight.”

Bitcoin lost a key level when it fell below $37,500, which could indicates a move lower over the next few days, according to Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno. He said the next stop down is $30,000, but if bitcoin doesn’t hold there it could drop to $25,000.

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