Bitcoin prices have been struggling recently, falling below $43,000 and failing to make substantial gains.
Around 9:20 a.m. EDT, the world’s most popular crypto asset retreated to $42,777.20, CoinDesk data show, Saturday.
Most cryptocurrencies were trading lower in the early hours of Saturday. While global crypto market cap fell by nearly 3 percent to $1.15 trillion over the last 24 hour, overall crypto market volume rose 9.3 per cent to $89.50billion.
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Bitcoin short stay at near $44K
Bitcoin managed to recover a little bit shortly afterwards, reaching $43,962.01 by 10 a.m. ET. It then retreated, dropping to $42,840 around 1:30 pm EDT.
The total volume of stablecoins, however, was $74.34 trillion, which is 83.06% off the 24-hour cryptocurrency market volume.
Bitcoin was recently trading at an average price of around $43,500, roughly where it was 24 hours ago and well below the $47,000 barrier it crossed just a few days earlier, as investors continued to weigh in on the Federal Reserve’s new hawkish zeal and the ongoing twist of economic developments sparked by Russia’s attack on Ukraine.
Source: TradingView.com| Source: TradingView.com
Unease Over Fed’s Monetary Policy Tightening
An email sent by Oanda Senior Market Analysis Americas Edward Moya states:
“Bitcoin is unsure of its direction as Wall Street gets concerned about the central bank’s aggressiveness in tightening monetary policy.”
Following these recent price swings, various experts expressed their predictions for the cryptocurrency’s future direction.
Ben McMillan (chief information officer, IDX Digital Assets) contributed his opinion, which indicated critical levels of support or opposition.
“$43k is a critical support level in the near term as bitcoin attempts to build on its recent relative strength,” he noted.
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Limit Inflation
Although cryptocurrency prices were slightly lower than the major equity markets’ performance, they still performed well. Nasdaq gained less that a tenth percentile point, as it is heavily biased towards the tech sector.
Over the past week, the US central bank communicated loudly, through both individual governors and collectively, that they will intensify efforts to control inflation. It has reached about 8% since 2000, an all-time high.
The correlation coefficient between Bitcoin and US equities has increased in the last 90 days as investors have become more risk averse in response to the Federal Reserve’s withdrawal of the pandemic-era intervention that is attributed with catalyzing the ascent of cryptocurrency.
Featured image taken from Research Affiliates. Chart from TradingView.com