The crypto market's aggregated cap dropped $1.4 trillion since November
- Union Budget 2023-24 Expectations: Crypto Sector Looks Forward to Tax Deduction
- FTX Collapse Has Put Spotlight on Vulnerabilities in Crypto Ecosystem: Economic Survey 2022-23
- Crypto Exchange Coinbase to Close Most of Japan Operations
Cryptocurrencies are moving in tandem with stocks, which continue to fall since the start of this year and just experienced its worst week since March 2020.
Investors are selling risk assets like technology stocks in preparation for stricter monetary policy from the Federal Reserve. They're also weighing the impact of further regulation on the crypto market as Russia's central bank plans to ban the mining and use of cryptocurrencies.
Bitcoin drops as Dow falls
On Monday, Bitcoin dropped to $32,982.11, its lowest point since July, according to Coin Metrics, but rose 5.6% in afternoon trading to $37,183.25. Meanwhile, the Dow fell as much as 1,115 points and the S&P 500 fell into correction territory for a brief moment.
Ether fell to as low as $2,176.41, its lowest since July, according to Coin Metrics. It then rose 1.1% to $2,444.85. Bitcoin and ether are both nearly 50% off their all-time highs.
"It's possible that macroeconomic concerns, such as the Fed's response to inflation rates, have facilitated more de-risking activity in general," said the head of OTC options trading at Kraken, Juthica Chou. "The recent price drop, coupled with high volatility, could be leading to further selling as participants look to reduce risk."
Some analysts say they see $30,000 as the next level of support for the cryptocurrency to test, but analyst John Roque of 22V Research believes bitcoin could fall even further. Roque said that he's been using $30,000 as a target, but spoke on the median historical bear market for bitcoin dropping 78%.
"A 78% decline from the bitcoin high of nearly $69,000 would imply a potential downside figure of about $15,000," said Roque. "It's probably safe to say that not one bitcoin bull has that figure in their model. To be sure, we don't either, but we think it's worth keeping in our back pocket in case we need it."
Source: marca.com
