Bitcoin
Other cryptocurrencies also fell sharply on Wednesday, dropping along with stock prices due to broader market concerns. Digital asset prices are below key technical levels, suggesting further declines are possible.
Bitcoin has fallen 6% in the past 24 hours to $57,500, but has previously traded around $56,500 and is about $10,000 below its 50-day moving average of $66,500. Although it is below, this indicates significant weakness in the technical market. The largest digital asset held nearly $62,000 before being sold on Tuesday, and its price is now well below its all-time high of around $74,000 in mid-March.
“The technical downside target is currently $55,700 (61.8% Fibonacci retracement of the rise since October) and the $51,000-$52,000 area,” said Alex Kupczykevich, analyst at broker FxPro. (It appears to be a consolidating area in late January.)
US macroeconomic news took center stage after the token plunged on Tuesday.
S&P500
And the rest of the stock market. Bitcoin has been shown to be correlated with other risk-sensitive assets such as stocks, and is similarly vulnerable to the outlook for interest rates, which impacts investors' risk appetite.
Arthur Fastoff, chief business officer at blockchain payments group Mercurio, said: “Amid the trading turmoil of the past 24 hours, which has seen a significant decline in the overall crypto market, Bitcoin as a so-called ‘risk asset’ has “The status of the coin was emphasized.” “The crypto space could even provide a bellwether for traditional markets ahead of today's Fed policy decision, as we see the prices of major digital tokens plummet.”
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The dominant market view remains the outlook for sustained inflation and interest rates, with investors betting that persistent price increases will allow the Federal Reserve to keep interest rates at generational highs for longer than previously thought. I'm worried that I might end up doing this. Tuesday's economic data triggered a rebound on inflation, leading to market declines as other triggers loom, including Wednesday's Fed interest rate decision and Chairman Jerome Powell's press conference ahead of Friday's key U.S. jobs report. .
“both [the Fed decision] The monthly jobs report later today and Friday has a good chance of accelerating or reversing the downward trend. [in Bitcoin]” Kupczykevich said.
Beyond Bitcoin
ether
The second-largest cryptocurrency by market capitalization fell 4% to below $2,900. Small tokens are also weak;
Solana
Slide 5%,
ripple
1% retreat. Meme coins are even more in the red,
dogecoin
decreased by 8%,
Shiba Inu
5% off.
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Email Jack Denton at jack.denton@barrons.com.
