Bitcoin, the world’s largest cryptocurrency, has declined nearly 60% this year.
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Bitcoin fell Monday and other cryptocurrencies followed it lower ahead of what’s expected to be the third straight outsized interest rate hike from the Federal Reserve when the central bank meets this week. It could be coiling for a big move.
Bitcoin has fallen to $19,089, down 6.1% over the past 24 hours, according to CoinDesk. The world’s largest cryptocurrency has declined almost 60% this year. It came off earlier lows that had Bitcoin trading at levels last seen in December 2020.
Ether, the second-largest crypto, has declined more than 6% over the past 24 hours to $1,343. The native token of the Ethereum blockchain network last week completed its highly anticipated upgrade known as “The Merge.” The upgrade, however, has been overshadowed by macro factors, including renewed fears around inflation and the prospect of a recession.
Also adding to nervousness around cryptos was the White House’s unveiling last week of the Biden administration’s plans to regulate the industry, said Edward Moya, senior market analyst at Oanda.
“Bitcoin is lower following the selloff in equities as risk appetite remains in hiding,” Moya said last week as equities tumbled following hotter-than-expected inflation data, an earnings warning from FedEx (ticker: FDX), and anticipation by Wall Street that the Fed will boost interest rates by 75 basis points for the third straight policy meeting in its effort to tame inflation. The Fed’s decision on rates is expected Wednesday afternoon.
Bitcoin hasn’t done much over the past three months. Since mid-June, it has traded as low as $18,271 and as high as $25,212, but has remained essentially rangebound. Rick Bensignor of Bensignor Investment Strategies noted that open interest in Bitcoin futures has risen by 20% over that past few months, with the crypto doing very little over that time period. “That means a big move is in the works,” he wrote.
Crypto-related stocks followed Bitcoin lower on Monday. Coinbase (COIN) was down 4.7%, Marathon Digital (MARA) declined 1.5%, and Riot Blockchain (RIOT) fell 1.2%.
Write to Joe Woelfel at joseph.woelfel@barrons.com
Source: finance.yahoo.com