Bitcoin briefly drops to its lowest level in 3 months as risk assets continue to get crushed

Ether has vastly outperformed bitcoin since both cryptocurrencies bottomed in June 2022. Ether’s outperformance has come as investors anticipate a major upgrade to the ethereum blockchain is called “merge”.

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Bitcoin fell to a three-month low on Monday as investors dumped riskier assets amid expectations of higher interest rates.

According to Coin Metrics, the world’s largest cryptocurrency fell about 5% to an intraday low of $18,276, its lowest level since June 19. It was last down 1.2% at $. 19,465.00. Bitcoin is down 3.77% this month and is on track for a second negative month in a row after dropping 15% in August.

Sadie Raney, co-founder and head of operations at Strix Leviathan. “These forces could mute the overall crypto complex until the financial system stabilizes and the regulatory framework becomes clearer.”

Ether also fell a similar 5% to $1,281 a day on Monday, hitting its lowest level since July 15. Last time it was 1.6% lower at $19,465.00. It is now down -13.8% this month, on track to post its worst month since June.

Risk assets have come under heavy pressure as the Federal Reserve is expected to follow its aggressive tightening schedule. The central bank is expected to approve this week third consecutive interest rate hike 0.75 percentage points that will bring the benchmark up to the 3%-3.25% range.

“Retail buyers have a long-term outlook for bitcoin while institutional traders are viewing digital assets like tech stocks,” said Chris Kline, chief revenue officer and co-founder of Bitcoin. and adopting the short-term mentality that contributed to the sell-off we are seeing” IRA. “Fed tightening policy is underpinning the dollar and is weighing on risk assets, overall.”

So-called “whales” – institutions, miners or people who hold large amounts of bitcoin, often with more than 1,000 bitcoins in their wallets – have been guarding macro conditions and selling their coins since June, according to Julio Moreno, senior analyst at blockchain analytics firm CryptoQuant.

That is evidenced by the increasing number of coins being sent to exchanges and into the hands of retail investors who believe bitcoin is finding a bottom at these levels, even though it is indeed still must go further, he said.

CryptoQuant data shows that bitcoin bottomed out between $10,000 and $14,500 during this cycle.

CNBC’s Gina Francolla contributed to this report.

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