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Lead Of Crypto Altcoins Drops; Bitcoin Price Drops Back Below $19,000

Prices in the cryptoasset market plunged across the board on Thursday, with so-called altcoins being hit particularly hard as risk aversion continues to weigh on global financial markets.

Prices in the cryptoasset market plunged across the board on Thursday, with so-called altcoins being hit particularly hard as risk aversion continues to weigh on global financial markets.

Bitcoin, the largest cryptocurrency by market value, fell a whopping 3% in New York on Thursday to $18,585, its lowest point since Sept. 27. Ether fell more than 4%, with both coins tending towards the bottom of their respective ranges.

“As far as we can see, Bitcoin has been trading on a trendline between the lows of 2018 and 2022 for the past month. It has just dived below, but has generally recovered quite quickly,” said Fadi Aboualfa, head of research at crypto custodian Copper. “Based on some of our own forecasts, we see Bitcoin trading closer to $21k by the end of the month if macro events do not weigh negatively.”

Elsewhere, US futures traded positively and options activity showed a rise in hedging ahead of a US inflation report in September. Minutes from the Federal Reserve’s September meeting on Wednesday showed that officials were determined to raise interest rates to curb inflation, a touchstone for crypto activity where Bitcoin has largely moved along with risky assets.

“At a time when we move from interest rate and inflation fears to a probable recession, while reducing risk exposure, investors may be more willing to hold traditional risk assets than cryptos that have become increasingly popular as an alternative in the zero interest environment. said Craig Erlam, senior market analyst at Oanda Europe Ltd.

Meanwhile, altcoins including Solana, Avalanche, Polygon and Cardano are all down more than 6% in the past 24 hours. As interest rates have risen this year, traditional markets such as US Treasuries and corporate bonds have outperformed yields on decentralized financial protocols where yields are declining.

Volatility has also been absent from crypto in recent months, with fiat currencies taking its place as the new hotspot for traders looking to take advantage of price differentials between exchanges. The T3 Bitcoin Volatility Index is down 6.7% since early September, while the JPMorgan Global FX Volatility Index is up 13.4%.

“Altcoins have traded above their trendlines,” said Aboualfa. “It may be that markets are giving things their final test to see if things can hold up, but they could certainly fall much lower with ETH testing just under $1k, and Solana around $27.”

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