Bitcoin Falls Below $19,000. Why a Big Move May Be Coming

Barrons2022-09-19

Bitcoin traded a new one-year low on Monday and other cryptocurrencies followed it lower ahead of what’s expected to be the third straight outsize interest rate hike from the Federal Reserve when the central bank meets this week.

Bitcoin has fallen to $18,688, down 6.1% over the past 24 hours, according to CoinDesk. The world’s largest cryptocurrency has declined almost 60% this year. It came off earlier lows that had Bitcoin trading at levels last seen in December 2020.

Ether, the second-largest crypto, has declined more than 8% over the past 24 hours to $1,307. The native token of the Ethereum blockchain network last week completed its highly anticipated upgrade known as “The Merge.” The upgrade, however, has been overshadowed by macro factors, including renewed fears around inflation and the prospect of a recession.

Also adding to nervousness around cryptos was the White House’s unveiling last week of the Biden administration’s plans to regulate the industry, said Edward Moya, senior market analyst at Oanda.

“Bitcoin is lower following the selloff in equities as risk appetite remains in hiding,” Moya said last week as equities tumbled following hotter-than-expected inflation data, an earnings warning from FedEx (ticker: FDX), and anticipation by Wall Street that the Fed will boost interest rates by 75 basis points for the third straight policy meeting in its effort to tame inflation. The Fed’s decision on rates is expected Wednesday afternoon.

Rick Bensignor of Bensignor Investment Strategies notes that open interest in Bitcoin futures has risen by 20% over the past few months, with the crypto doing very little over that time period. “That means a big move is in the works,” he writes.

Crypto-related stocks followed Bitcoin lower on Monday. Coinbase (COIN) was down 3.7%, Marathon Digital (MARA) declined 4.3%, and Riot Blockchain (RIOT) fell 3.1%.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • cutemiao
    2022-09-20
    cutemiao
    So sad
  • robot1234
    2022-09-19
    robot1234
    Bitcoin briefly drops to its lowest level in 3 months as risk assets continue to get crushed. The world’s largest cryptocurrency dropped as much as about 5% to hit an intraday low of $18,276, its lowest level since June 19, according to Coin Metrics. It was last down 1.2% at $19,465.00. Bitcoin is down 3.77% this month and on pace for the second straight negative month after plunging 15% in August. “Regulatory pressure, rising base rates, and inflation are pressing heavily on riskier asset classes, especially crypto, and are thus forcing liquidations, reducing capital available for investment, and increasing concerns over undefined regulatory controls,” said Sadie Raney, co-founder and head of operations at Strix Leviathan. “These forces may mute the overall crypto complex until the f
  • CW37
    2022-09-19
    CW37
    tiger
  • lololol13
    2022-09-19
    lololol13
    Ok
  • CIG
    2022-09-19
    CIG
    Buy and hold forever (foxl likes to say).
  • YS_ZENG
    2022-09-19
    YS_ZENG
    Noted.Pls like
Leave a comment
8