Abstract:Bitcoin tumbled over 7% on Monday to its lowest in six months, as fears of a Russian attack on Ukraine saw riskier assets worldwide extend their selloff.
Bitcoin gained on the day on Monday as buyers stepped in to buy the cryptocurrency, after earlier tumbling to its lowest level in six months on fears of a Russian attack on Ukraine and before this weeks Federal Reserve meeting.
The largest cryptocurrency was last up 2.5% at $37,250 after earlier dropping to $32,951, its lowest price since July 23. That took losses from its all-time high of $69,000 hit in November past 50%.
Bitcoin is now at a critical juncture where analysts say that further selling could reverse its long-term bull trend.
The currency fell earlier on Monday on rising tensions between Russia and Ukraine. NATO said it was putting forces on standby and reinforcing Eastern Europe with more ships and fighter jets, in what Russia denounced as an escalation of tensions over Ukraine.
Nerves over the Federal Reserves two-day policy meeting, starting on Tuesday, added to the mix, with the U.S. central bank expected to confirm it will soon start draining the pool of liquidity that has supercharged growth stocks.
“The story is really how aggressive is the tightening,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York, noting that a Fed move to reduce the size of its balance sheet will tighten conditions along with higher interest rates.
Cryptocurrencies fell along with other risk assets as “people are pulling back on risk broadly,” he added. Stocks also bounced off their lows in afternoon trading. [.N]
Katie Stockton, founder of technical analysis firm Fairlead Strategies, said that closing this week above the $37,400 level, where there is support from the Ichimoku cloud bottom, may be key to whether the selloff is a correction in an uptrend, or the start of a bear trend.
If Bitcoin fails to rise back above this level, then “the long-term uptrend is essentially reversed by that breakdown,” she said.
Around $465 million in crypto assets have been liquidated in the past 24 hours, according to data from Coinglass, with Bitcoin trades accounting for $167 million of that total.
Smaller cryptocurrencies, which tend to move in tandem with bitcoin, also slumped but ended off their lows. Ether, the second-largest digital coin, was last down 3.5% at $2,451, after earlier reaching $2,160, its lowest level since July 27.
U.S.-listed cryptocurrency miners Riot Blockchain and Bit Digital and Marathon Digital also rebounded from earlier lows while crypto exchange Coinbase Global pared most of the days losses.
Disclaimer:
The views in this article only represent the author's personal views, and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness and timeliness of the information in the article, and will not be liable for any loss caused by the use of or reliance on the information in the article.
Wednesday's major data releases and macroeconomic events are expected to cause volatility to increase after another day of erratic trading in the financial markets. The Spring Budget for the UK will be released, and January Retail Sales figures for January will be made available by Eurostat. ADP Employment Change for February and January JOLTS Job Openings will be discussed later in the session on the US economic docket.
Major currency pairings are still trading in familiar ranges early on Tuesday after the erratic trading on Monday. The US economic docket for the American session will include the factory orders data for January and the ISM Services PMI survey for February. Final updates to the February PMI for the US, Germany, the UK, and the EU will also be released by S&P.
Weekend trading has gained great popularity in recent years due to the rise of online and mobile trading platforms that provide retail investors easy access to markets outside of regular working hours. For traders with Monday-Friday, 9-to-5 jobs, trading on weekends allows them to be active in markets at convenient times.
West Texas Intermediate (WTI) oil price pauses its two-day winning streak but is anticipated to conclude the week on a positive note, trading near $77.00 per barrel during the Asian session on Friday.