Bitcoin’s slide continued Monday, building on last week’s losses, and the cryptocurrency’s sell-off could spell bad news for stocks. That’s because there’s a correlation between the two, according to MKM Partners. Essentially, the firm said that action in the cryptocurrency market can be a pulse check for how investors view the overall health of the economy. The firm said that bitcoin has been a “great gauge of investors’ risk threshold for equities.” “Bitcoin is at risk of falling below crucial support. Plenty of longs who bought in last year are still trapped, and thus we could easily see a pullback to $19,500. That would be a bearish read through for stocks,” analysts led by JC O’Hara wrote in a note to clients. The world’s largest cryptocurrency dropped 15% on Monday, hitting the lowest level since December 2020, according to data from CoinDesk. The cryptocurrency stood at $23,385 at 9:20 a.m. on Wall Street. The drop follows a steep sell-off over the weekend, which saw $200 billion wiped from the entire cryptocurrency market. After these declines, the market capitalization of the broader crypto market is now below $1 trillion for the first time since February 2021, data from CoinMarketCap shows. The selling isn’t just happening in the crypto market. The Dow is coming off its tenth down week in the last 11, while the S & P 500 and Nasdaq Composite both posted a ninth weekly decline in 10. The major averages dropped on Friday following the latest inflation reading for May, which showed a faster-than-expected jump in prices. Additionally, consumer sentiment hit a record low. Rampant inflation and expected rate hikes this week and again in July from the Federal Reserve have weighed on the cryptocurrency market too. “The key driver of the plunge is likely incrementally aggressive Fed tightening after Friday’s white hot inflation report,” said Jay Hatfield, chief investment officer at Infrastructure Capital Management. “The Fed’s overexpansion of its balance sheet led to a number of bubbles including tech stocks, crypto tokens, meme stocks and SPACs,” he added. Still, bitcoin’s tumble hasn’t soured all investors on cryptocurrency. Bank of America recently surveyed more than 1,000 cryptocurrency and digital asset exchange users and prospective users, finding that “despite the sharp correction in crypto valuations, consumer interest in the sector remains strong.” More than 90% of respondents said they plan to buy crypto or digital assets in the next six months, which is the same number who said they bought over the last six months. Despite steady interest from consumers, Oppenheimer is among the firms noting that significant headwinds remain for crypto. “Bitcoin’s outlook remains clouded as China’s central bank takes steps to curb its usage in China and as regulators elsewhere around the world consider the potential risks it could present for institutions, private investors, and consumers,” said John Stoltzfus, chief investment strategist at Oppenheimer Asset management. “Thus far in 2022, it has failed to serve as a safe haven asset or as a hedge against inflation as some proponents of the cyber currency had hoped,” he added. – CNBC’s Michael Bloom and Arjun Kharpal contributed reporting.