Bitcoin continues to trade in a decent range of $18,000 to $25,000 mark, keeping investors on edge about where the value goes next. The crytpo market has been plagued with quite a few issues from collapsed projects to bankruptcies.
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Bitcoin briefly topped $20,000 on Tuesday, hitting its highest level within the greater than every week, but remains to be struggling to interrupt out of its tight trading range.
The world’s largest cryptocurrency by market cap turned lower, nonetheless, as stocks fell deeper right into a bear market. It was last lower by about 1% at $18,947.00, based on data from Coin Metrics. Ether was down by lower than 1%.
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Bitcoin continues to has struggle for direction. It has been trading between $18,000 and $25,000 since mid-June after a crash saw nearly $2 trillion wiped off your complete crypto market since its peak in November.
That market decline was driven by rate of interest rises from central banks aimed a controlling rampant inflation in addition to a wave of bankruptcies and insolvency issues that filtered through the crypto industry.
Crypto investors have been watching monetary policy because digital currencies have been closely correlated to U.S. stock markets this 12 months. Higher rates of interest have put pressure on the S&P 500 and tech-heavy Nasdaq, which has filtered through other dangerous assets including cryptocurrencies.
The U.S. Federal Reserve’s 0.75 percentage point rate hike last week marked a “major event” for crypto markets, based on Vijay Ayyar, vp of corporate development and international at crypto exchange Luno.
“This was broadly in step with market expectations and hence, we have seen lots of that sentiment priced in,” Ayyar said.
Interestingly, bitcoin’s rally, which began on Monday, happened despite a fall in U.S. stocks with the S&P 500 closing at its lowest level of 2022. Stock futures rose on Tuesday. So, there are signs that perhaps the correlation between crypto and stocks may very well be weakening.
Meanwhile, investors are watching the U.S. dollar closely. The dollar index, which tracks the greenback against a basket of currencies, is up greater than 18% this 12 months. Bitcoin moves inversely to the dollar, so a powerful greenback is negative for bitcoin. Nevertheless, Ayyar said that the dollar index may very well be nearing its top which might mark a possible bottom for bitcoin. That may very well be a reason behind bitcoin’s surge.
“Traders hence may additionally be positioning themselves accordingly,” Ayyar said.