$Bitcoin(BTC.CC)$ traded below the psychologically important $20,000 mark Thursday evening as the global cryptocurrency market cap slid 4.1% to $859.3 billion at press time.

Why It Matters: Bitcoin traded below its 200-day simple moving average on Thursday, noted GlobalBlock analyst Marcus Sotiriou.

Bitcoin has not retested this level as resistance, but if it does and rejects back down, this would be a very bearish signal. This is because it would be the first time that this level has been broken on a long-time frame and could suggest an extended bear market is on the horizon." 

- said Sotiriou in a note, seen by Benzinga.

On Thursday, the U.S. Securities and Exchange Commission rejected Grayscale's proposal to convert $Grayscale Bitcoin Trust(GBTC.US)$ into a spot Bitcoin exchange-traded fund. This was the "straw" that broke the $20,000 level's back, according to Edward Moya, a senior market analyst with OANDA.

Negative crypto headlines have been nonstop and fresh concerns that the regulatory environment will be rather harsh going forward has really kept sentiment down." 

- said Moya.

If the bloodbath on Wall Street remains the theme in the third quarter, Bitcoin could be vulnerable to one more ugly plunge that could have many traders fearing a fall towards the $10,000 area."

Cryptocurrency trader Michaël van de Poppe pointed to the upcoming U.S. core consumer price index numbers, which he said would be "decisive for stock markets, and probably crypto."

Van de Poppe painted a bullish picture for the apex coin on Thursday and said it "makes you think" when you see more and more calls for Bitcoin towards the $10,000 mark.

Fellow trader Justin Bennett noted that the S&P 500 breakdown overnight dragged Bitcoin below the $20,000 mark. He expects the U.S. benchmark index to find support at the 3,700 level but ultimately to slip down to 3,640 and 3,400 levels.

"More pain is coming," said Bennett in a tweet. 

The $S&P 500 index(.SPX.US)$ closed 0.9% lower at 3,785.38 on Thursday, while the $Nasdaq Composite Index(.IXIC.US)$ ended 1.3% lower at 11,028.74. 

Santiment tweeted that $XRP(XRP.CC)$, a coin associated with Ripple Inc, is "holding up" better than most altcoins. The market intelligence platform said that the XRP network "exploded with unique addresses interacting" on it, which exceeded 200,000 for the first time since February 2020. 

On the Ethereum side, chartist Ali Martinez said the second-largest coin by market cap is at "risk of a steep correction." Martinez pointed to transaction history and said that 468,000 addresses with more than 7 million ETH are now underwater and could exit positions.

A spike in selling pressure could trigger a downswing to $700 or even $600." 

- said Martinez.