Within 24 hours, the post-Meeting of the Federal Reserve Board’s post-meeting cryptocurrency “relief rally” was erased and Bitcoin could not exceed its major $ 40,000 price.
The slide of risk assets is as follows What analysts and traders expected on Tuesday..
Bloomberg Intelligence product strategist Mike McGrone witnessed a “trader noise” of cryptocurrencies and stocks, calling it a daytime “relief rally” on Wednesday.
“What happened yesterday was great for traders, but we have to expect it to last for the past few weeks,” McGlone told Yahoo Finance. “That is, the Fed has become bold about inflation and the decline in risk assets.”
With more than 5% falls in the last 24 hours, Bitcoin changed hands at a cheaper pace on Thursday, dropping from $ 39,500 to $ 36,900 per coin between 9am and 11am New York time. Ethereum (ETH) sold out 3.5% on the day from $ 2,939 to $ 2,752. The Nasdaq and S & P 500 are trading 5% and 3.7% lower, respectively.
Since January, Bitcoin has sold out 22.5% from $ 47,733, tracking losses almost in sync with the Nasdaq Composite Index (-22.1% YTD).
Currently, BTC holds the closest 30-day correlation (.90) with Ethereum (ETH), the second largest cryptocurrency.
After Federal Reserve Chairman Jerome Powell showed that the 75 basis point rise was not at the table, risk assets rose and trading volumes and real volatility soared before and after the announcement, but trading volumes were. It retreated rapidly within 24 hours.
One reason is that short-term uncertainties still dominate the main scope of institutional investor thinking, according to Michael Saffai, a partner of cryptocurrency proprietary trading company Dexterity Capital.
Based on data from Coinbase’s analytics platform Skew, implied volatility is a substitute for investors’ willingness to buy BTC options, down to the lowest level (3.1%) since early 2019. Indicators measure the amount that option traders expect to pay in the short term.
“There is a decline and flow in the correlation between Bitcoin and equities, especially around these major macro events, such as the Federal Open Market Committee meeting. This is primarily algorithmic trading,” said GSR’s institutional crypto trader. John Kramer said.
Based on Tuesday’s Coinmetrics data, the 30-day correlation between Bitcoin and the S & P 500 is often low for the crypto market, but remains high for seven days from 2022. On the other hand, the relationship with gold remains inversely correlated, but has not been closely tracked in recent weeks.
“Emotionally, it’s more important to see how the crypto market works at the closing price of the stock market from daytime to Friday,” Kramer added.
“From now on, cryptocurrencies have the most to lose,” continues Bloomberg’s McGrone. “Nevertheless, Bitcoin shows divergent strength because it is well known as an unstable asset. Ultimately, it and ether should come out before, not overnight. . “
David Hollerith describes Yahoo Finance’s cryptocurrency.Follow him @dshollers..