Most cryptocurrencies traded lower on Friday, tracking losses in equities.

Bitcoin (BTC), the world's largest crypto by market capitalization, dipped below $40,000, the midpoint of a three-month price range. Choppy trading conditions indicate uncertainty among traders, especially as macroeconomic and geopolitical risks linger.

Further, the rising correlation between BTC and stocks means investors are more sensitive to the impact of rising interest rates on asset values, similar to what occurred in 2014 and 2018. That could keep some buyers on the sidelines, which points to lower market returns, especially compared with the previous two years of unprecedented monetary and fiscal stimulus.

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On Friday, most alternative cryptocurrencies (altcoins) declined by less than bitcoin, which suggests the current pullback in prices could be temporary. Typically, altcoins underperform in a market sell-off because of their higher risk profile relative to bitcoin.

Technical indicators suggest that bitcoin could stabilize around $37,500 despite signs of slowing price momentum on the charts.

The chart below shows the downtrend in bitcoin's implied volatility, which creates a difficult environment for some option traders who profit from unexpected price swings.

Still, traders have positioned themselves for short-term spikes in volatility or downside risk, especially around key events or announcements.

For example, on April 10, Arthur Hayes, co-founder of crypto derivatives trading platform BitMEX, warned about a BTC price crash toward $30,000. That blog post triggered massive selling of May and June option calls, which caused BTC and ETH risk reversals (calls minus puts) to fall from -6% to -10%, according to QCP Capital, a Singapore-based crypto trading firm.

"At the same time, the recent proliferation of algorithmic stablecoins seems to have placed a soft floor in the market," QCP wrote in a Telegram announcement. "While this effect has provided some relief to crypto markets, it remains to be seen if this model is sustainable in the long run."

Bitcoin's put/call ratio ticked lower over the past few days, indicating a slight loss in bearish sentiment among options traders.

Celsius says its CEL token faces regulatory risks: The crypto lending company sharpened its “Risk Disclosures” messaging in recent days, carving out a section for the high-yield Celsius Earn Program, saying that it “may be considered a risky investment” and highlighting “regulatory” among the risks to CEL. The company last week restricted new “Earn” program sign-ups in the U.S. to accredited investors. Read more here.Binance recovers $5.8M linked to Axie Infinity hack: The funds were distributed over some 86 accounts, Binance founder Changpeng Zhao said in a tweet on Friday. “The [North Korean] hacking group started to move their Axie Infinity stolen funds today. Part of it made to Binance, spread across over 86 accounts. $5.8M has been recovered,” he said. Axie Infinity's token AXS is down by 50% so far this year. Read more here.Polygon commits $100M to Supernets: The tool aims to fast-track blockchain adoption by reducing the barrier of entry for developers who previously used Polygon Edge. On each Supernet, validators will stake MATIC tokens on the mainnet before going on to validate the network to ensure a robust level of security. Read more here.

Bailout Fund, Backstop or Bouncy Ball? Here's How LFG's Bitcoin 'Reserve' Might Work: Developers of the fast-growing UST stablecoin say the coin's $1 value peg isn't "backed" by anything – just a blockchain-based algorithm. So why does it need a multibillion-dollar bitcoin reserve in case of an emergency? How would that work?Listen 🎧: Risk aversion has contributed to additional selling pressure across speculative assets, including crypto, and now there's another round of unclear rules from the U.S. Securities and Exchange Commission. CoinDesk’s Markets Daily is back with the latest news roundup.Ukraine's Central Bank Bans Crypto Purchases in Local Currency: Individuals may only purchase crypto using foreign currency up to a value of 100,000 Ukrainian hryvnia (US$3,400) per month.Retail Interest in Bitcoin Is Dwindling, Google Data Suggests: Data from Google’s search trends suggest retail interest in bitcoin and other major cryptocurrencies could be waning.Seized Silk Road Bitcoin to Clear Ross Ulbricht's $183M Debt: A court filing reveals that bitcoin seized in 2020 will be used to repay the Silk Road founder's debt to the U.S. government.Treasury Sanctions More North Korea-Linked ETH Wallets Over $600M Ronin Hack: The three new wallets join an Ether address added to the sanctions list last week.

Most digital assets in the CoinDesk 20 ended the day lower.

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.