Bitcoin falls to low this month with risk of further lows

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(Bloomberg) — Bitcoin fell to a three-week low as stocks continued to fall.

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The biggest cryptocurrency fell 1.9% on Tuesday to $16,277, the lowest level since Nov. 29. The second-largest Ether fell 2.1% to its lowest since Nov. 28. The moves come as the S&P 500 slid for a fourth straight session amid jitters about the Federal Reserve’s potential rate hike trajectory.

We expect a retest of November lows near $15,600 in the coming weeks after a failed test of levels between $17,000 and $18,000, said Katie Stockton, founder of Fairlead Strategies LLC. We eventually expect Bitcoin to make a lower low, increasing risk for long-term support near $13,900.

Cryptocurrencies have had a tough 2022 after hitting record highs late last year, rocked by everything from federal policy crunch to implosions in the Terra/Luna ecosystem, hedge funds Three Arrows Capital and FTX exchange. They have been strongly correlated with US equities for a few years now, and Fundstrat digital asset strategist Sean Farrell said in a note that this was the reason for Monday’s crypto decline.

Traders may also need to be on the lookout for situations that come with holiday season trading, according to Bitfinex.

As the end of the year approaches, many companies and traders are taking a break, but the slowdown in trading activity brings the risk of increased volatility, given the drop in trading volume and liquidity. , Bitfinex analysts said in a report. This is already evident on the lower timeframes, although the price action on the higher timeframes appears to be in the range between $16,000 and $18,000.

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