Angelic9
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Bitcoin declined along with stocks and U.S. equity futures as the prospect of aggressive Federal Reserve policy tightening hung over cryptocurrencies.
The largest digital token by market value dropped to $35,790 at 10:05 a.m. in Hong Kong after having risen as high as $38,927 on Wednesday. Stock markets from Japan to Australia sank sharply, as did U.S. equity futures, as traders concluded Fed Chair Jerome Powell is determined to increase borrowing costs in the face of runaway inflation.
Bitcoin is still comfortably above the $33,000 level it breached on Monday, which was more than 50% off its November peak. The carnage in risk assets prompted some analysts to point to $30,000 as a key support level. That’s a threshold Bitcoin hasn’t breached since July.
Crypto’s correlation with equities strengthened in recent weeks as investors reacted to the prospect of tightening U.S. monetary policy by dumping high-priced tech stocks and digital tokens alike. Bitcoin’s moves in tandem with the Nasdaq 100 and the S&P 500 reached an all-time high this month, buoying confidence that one of the world’s more volatile major assets could become more predictable in future.
The Fed signaled it will start raising interest rates “soon” and shrink its bond holdings after liftoff has begun, moving toward ending ultra-easy pandemic support to fight the hottest inflation in a generation.
“The overall sentiment in crypto is let’s try and settle in a range and do short term trading or find dislocations,” said Todd Morakis, co-founder of digital-finance product and service provider JST Capital, in an email Wednesday. “There are some bargain hunters here, but most of the people have been waiting for a time to invest in crypto and will continue to buy quality coins as the market moves down.”
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#HAPPY WINDICE
