Cryptocurrency markets and global equity markets traded sharply lower during Monday morning's session.

At the time of writing, the Dow Jones Industrial Average was down 2.9%, adding to declines since the beginning of the month. The tech-heavy Nasdaq Composite, meanwhile, was down 1.8%. The bearish sentiment seeped into cryptocurrency space with the market's blue-chip tokens trading in the red.

Crypto markets have been highly correlated to equities over the course of the pandemic. As for stocks, specifically, Edward Maya of OANDA noted that "global stock markets are tumbling as coronavirus cases surge in Europe, political tensions in the US will likely derail any further fiscal support efforts." The surge in cases could result in further restrictions and lockdowns, which could put further pressure on the continent's economy. 

At last check, bitcoin was trading down more than 4% over the last 24-hours at $10,432. 

A sharp decline in the prices of various DeFi tokens — many of which are built on top of Ethereum — has underpinned the precipitous drop of the second-largest crypto. FTX’s DeFi index, which reached a peak of $3,500 on September 1 — and has since dropped by 44% — was sitting at a 50-day low of $1,960 as. of Monday morning, as noted by my colleague Larry Cermak. 

As for ether itself, the cryptocurrency was trading down more than 8% at $339 per coin —its lowest price since the end of July.

Elsewhere, the sell-off was hammering gold, a safe-haven asset. Bullion was trading down more than 3% at $1,891 an ounce. 

"Surging coronavirus cases and doubts over the next over the next round of fiscal support is triggering a wide range risk averse tone that is sending the dollar higher and sinking gold," Moya noted. "Exponential coronavirus growth is a big risk in Europe and that is sending the dollar sharply higher.  Dollar strength can go a little further as emerging market currencies have room for bigger declines."