Bitcoin Falls As Cryptos Rally Faces Test. Why could it get ugly.

[ad_1]

Text size

Bitcoin prices appear vulnerable to losses after momentum from a recent rally faltered. The time of dreams

Bitcoin and other cryptocurrencies were down on Thursday, falling in line with the stock market as investors fret over the prospect of a recession. The big rally in digital assets over the past week, which had little fundamental support, will now be tested.

The price of Bitcoin has fallen 2% in the past 24 hours to below $20,800. The biggest crypto had closed at $21,500 at the height of recent trading, the zenith of a stunning rally that took Bitcoin more than 20% higher in a matter of days to levels not seen since the platform’s collapse. influential FTX trading in November.

Bitcoin prices are weakening as growth fears raise fears on Wall Street that a soft landing may not happen. The outlook for the crypto has improved significantly over the past few weeks, but the current rebound finally appears to be facing some resistance, said Edward Moya, an analyst at brokerage Oanda.

Bitcoin had hit a two-year low following the FTX bankruptcy, falling to near $15,500, and hovered between $16,500 and $17,000 for weeks before beginning its upward march the last week in the longest winning streak in nearly a decade.

But the momentum began to reverse on Thursday after the Dow Jones Industrial Average and S&P 500 fell on Wednesday, the worst day for the stock market in 2023 so far, and were set to suffer more losses in the coming day. Investors fear the Federal Reserve won’t be able to stage a soft landing to tame inflation while avoiding recession with concerns leaking from stocks to crypto given the correlation between the two price-sensitive assets. risk.

Beyond Bitcoin, Ether is the second largest cryptoshed by 3% at $1,530. Smaller cryptos or altcoins were also weaker, with Cardano and Polygon down 4% and 5%, respectively. Memecoins reversed an isolated mini-rally, with Dogecoin falling 6% and Shiba Inu 7% in the red.

Write to Jack Denton at [email protected]

[ad_2]