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Crypto prices have fallen sharply in recent days, surpassing the sale of shares.
Dusan Zidar / Dreamstime
Bitcoin sine
The fall continued on Wednesday when cryptocurrencies took another steep step down ahead of a central interest rate decision by the Federal Reserve.
Bitcoin had fallen 10% in the last 24 hours to $ 20,300, after losing 30% since last Friday, although they have fallen slightly to $ 21,373.26 at 9:19. traded below since the end of 2020.
Like stock market investors, cryptocurrencies are laser-focused on a monetary policy decision by the Federal Reserve. With inflation decades-high, the central bank has already moved aggressively to fight rising prices with tighter policies, including significantly higher interest rates. The risk is that the Fed will not be able to construct a “soft landing” or a cooling of inflation without causing a recession.
“If the Fed is tough or if the krypton alternative gets worse, Bitcoin at $ 15,000 is possible,” Samir Kerbage, head of product and technology at digital asset manager Hashdex, wrote in a note.
While Bitcoin and its peers in theory should trade independently of the regular financial markets, they have been shown to be correlated with stocks – and especially technology stocks. A tumble for
S&P 500
and
Nasdaq
indices since Friday, after signs that inflation had not yet peaked, have weighed on digital assets.
But stress in the crypto market itself, including the large crypto lender Celsius, which suspends customer withdrawals, has put even more pressure on crypto, which has sold more seriously than equities.
Exacerbation of cryptocurrency decline has been major liquidations of mortgaged positions in the cryptocurrency market. Margin positions can be sold in an instant if the value of the security – often Bitcoin – falls below a required level. More than 100,000 traders with positions worth around 290 million dollars have been wiped out in the last 24 hours, according to data from Coinglass.
“We can seek a quick withdrawal to $ 28,000- $ 30,000 if liquidations decrease and Celsius concerns decrease,” Kerbage wrote.
It was more of the same pain for other cryptos, included
Ether,
the second largest. The token underlying the Ethereum blockchain network fell 14% to $ 1,050, trading around $ 2,000 as recently as the end of last week.
“Bitcoin at $ 20,000 and Ether at $ 1,000 are the levels to see,” Kerbage wrote. “If these psychologically meaningful levels are lost, we can see significant fears in the market that could put more pressure on the short-term price action.”
Smaller cryptocurrencies, or altcoins, also suffered.
Cardano
and
Solana
each lost 12%. Memecoins also failed to keep goals, with
Dogecoin
and
Shiba Inu
falling by 11% and 8% respectively.
Write to Jack Denton at [email protected]
