On Monday, bitcoin returned to positive territory after a decline recorded last week.
It will be recalled that the bitcoin rate fell to $ 32,982.11, or the lowest point since July, according to Coin Metrics, but the largest cryptocurrency by market capitalization rose 5.6% in afternoon trading to $ 37,183.25, as wider agreements changed course and the day ended with higher values. At the beginning of the session, the Dow fell by as much as 1115 points, and the S&P 500 briefly fell into correction territory.
At the same time, Ethereum fell to 2176.41 dollars, which is the lowest level since July, according to Coin Metrics. Its latest increase was 1.1% to $ 2,444.85. Bitcoin and Ethereum are about 45% and 49% lower than their respective peaks at all times.
Cryptocurrencies are paired with stocks that have been falling since the beginning of the year and have just emerged from the worst week in two years. In preparation for tighter monetary policy, investors are even selling risky assets such as technology stocks.
“Macroeconomic concerns, such as the Federal Reserve’s response to inflation, could have contributed to greater risk reduction overall,” said Utica Chow, head of Kraken’s OTC options trading.
“The recent fall in prices combined with high volatility could lead to further sales as participants seek to reduce risk.”
Investors are also assessing the impact of further regulation on the cryptocurrency market. Last week, Russia’s central bank proposed a ban on the use and digging of cryptocurrencies.
According to Vijay Ayyar, Luno’s vice president of corporate development and international expansion, given current market sentiment, bitcoin is likely to remain in the range of $ 30,000 to $ 32,000.
If the cryptocurrency is more than $ 30,000 a week, these levels can form the basis before the market rises. However, it may take some time for the market to rise, given the lack of confidence across the spectrum, he added.
Several other analysts have confirmed that they expect $ 30,000 as the next level of cryptocurrency. But analyst John Rock of 22V Research said bitcoin could fall even more. He also used $ 30,000 as a target, but noted that the average “historic bear market” for bitcoins fell 78%.
Investors are also struggling with rising inflation. Proponents of bitcoin have long argued that the digital coin is a protection against inflation, but this theory has not worked for many new investors.
As institutional interest in bitcoin grew last year, short-term cryptocurrency investors have grown more than ever. Analysts say there are fears that more aggressive US Federal Reserve policies could also shake the stability of the crypto market.