Crypto Altcoins Lead Decline; Bitcoin drops below $19,000

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Prices in the crypto asset market crashed on Thursday, after data showing US inflation at a 40-year high further eroded waning demand for riskier assets.

Bitcoin, the largest cryptocurrency by market value, fell 5.1% on Thursday in New York to $18,201, its lowest in about three weeks. The September low was the lowest since prices fell in June after crypto lender Celsius collapsed. Ether fell 8.2% as both coins trended lower in their respective ranges. Each is down more than 60% this year.

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“Crypto markets are clearing out right now,” said Garry Krugljakow, founder of 0VIX and GOGO Protocol, an open-source DeFi protocol for asset management and savings. He added that the Bitcoin selloff “will be continuous until the next Federal Reserve meeting in November.”

Minutes from Wednesday’s September Fed meeting showed officials determined to raise interest rates to rein in inflation, a touchstone for crypto activity where Bitcoin has moved largely in tandem. with risky assets. The core consumer price index, which excludes food and energy, rose 6.6% from a year ago, the highest level since 1982, department data showed on Thursday. work.

Meanwhile, altcoins including Solana, Avalanche, Polygon, and Cardano all fell more than 9%. As interest rates have risen this year, traditional markets like US Treasuries and corporate bonds have outperformed among decentralized finance protocols where yields are falling.

Volatility has also been absent from crypto in recent months, with fiat currencies taking its place as a new hot spot for traders looking to profit from price differences 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 are trading above their trendlines,” said Fadi Aboualfa, head of research at crypto custodian Copper. “Markets may give things their last test to see if things can hold, but they can certainly drop much lower with ETH testing at just under $1,000 and Solana around $27.”

Some market watchers had noticed in recent days that Bitcoin behaved less volatile than stocks. Since early September, the coin has fallen less than the S&P 500, for example.

But the relative strength of the coin — and Ether — over the past few months has been an “illusion,” said John Roque of 22V Research.

“Many had pointed out that Bitcoin, in particular, had shown remarkable chutzpah over the past few months as it held its ground against deteriorating stocks,” he wrote in a note, adding that he saw Bitcoin drop to $10,000 and Ether to fall to the $420 level.

Read more: Crypto firm 21Shares lists bitcoin ETP on Nasdaq Dubai

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