It's down and out! Bitcoin is testing a key $40,000 support level after falling 42% from all-time highs

Meanwhile, Bitwise CIO Matt Hougan said bitcoin's decline makes sense as the Federal Reserve "sings hawkishly" and that cryptocurrency sentiment is likely to be subdued for a while as there are no obvious catalysts for an upswing in the near future.

Over the past year, bitcoin has become an increasingly mainstream asset as institutional and retail investors began investing in cryptocurrencies, but as the Fed has become more "hawkish," risky assets including bitcoin and tech stocks have been more affected.

Data shows that the Bloomberg Galaxy Cryptocurrency Index, which tracks the movement of a basket of cryptocurrencies, has fallen 10% from the beginning of the year to last Friday.