Bitcoin was holding near $36,000 on Friday, after it fell to $35,280, the lowest level since Jan. 23, as U.S. stocks extended losses, while Treasury yields rose and the dollar soared to some of its highest level in 20 years.
The correlation between bitcoin BTCUSD,
On Wednesday, , the Federal Reserve raised a key interest rate by a half percentage point and said that in June it will start a multi-trillion dollar balance sheet contraction.
“We think much of the price bump on Wednesday had to do with traders positioning heading into the event, while the reversal indicates a lack of confidence in the market and economic stability, especially against the backdrop of a contraction in 1Q GDP,” researchers at bitcoin company NYDIG wrote in Friday notes.
The crypto market’s performance over the weekend is worth watching, as it may reflect market sentiment and hint at directions of equity market on Monday, according to Jeffrey Halley, senior market analyst at OANDA.
John Kramer, director of trading at crypto market maker GSR, echoed the point. “There have been instances where bitcoin does lead the equity markets, sometimes being the first asset to be sold,” Kramer said in a phone interview.
As crypto trades 24 hours, seven days in a global market, “fund managers will potentially turn to that if they need to derisk something first,” Kramer said.
Still, with the market taking a dramatic turn this week, Kramer said he expects a quiet weekend.
Any negative developments over the weekend could send bitcoin price to as low as $32,000, “setting Monday up for a bad start,” Halley wrote in Friday notes.
If risk sentiment continues to deteriorate, investors will be watching $28,000 as the next support level, Halley noted.
U.S. stock indexes ended lower on Friday, with the Dow Jones Industrial Average DJIA,
Source: finance.yahoo.com