Cryptocurrencies tumble, with bitcoin falling 8% and ether down 9% in the last 24 hours

[MongiIG]

Bitcoin prices fell sharply on Thursday night, while ether prices also dived, wiping off nearly $150 billion from the crypto market.

Bitcoin fell by nearly 8% in the last 24 hours, and was trading at $38,709 as of 1:42 a.m. ET, according to CoinDesk data.

Ether, the second-largest cryptocurrency by market cap, dived over 9% in the last 24 hours. It was trading at $2,853 as of 1:42 a.m. ET, after falling as low as $2,809.51 in the last 24 hours, according to CoinDesk.

About $147 billion was wiped off the entire cryptocurrency market in the past 24 hours, according to Coinmarketcap.com

The declines in cryptocurrencies follow Wall Street losses on Thursday. The Nasdaq was down almost 5% this week, and the S&P 500 is into its third straight week of losses.

As the 10-year U.S. Treasury yield spiked earlier this week, rising rates have caused investors to shed their positions in riskier assets. Yields move opposite to prices.

The Federal Reserve have also indicated it plans to begin reducing its balance sheet, as well as tapering of bonds and raising interest rates.

A common investment case for bitcoin is that it serves as a hedge against rising inflation as a result of government stimulus, but analysts are saying the risk is that a more hawkish Federal Reserve may take the wind out of bitcoin’s sails.

As yields pulled back later in the week, however, foreign exchange trading firm Oanda’s Senior Market Analyst Edward Moya said it was “a little disappointing to not see bitcoin react more positively to the reversal in Treasury yields.”

Bitcoin prices have fallen sharply since November, tumbling more than 40% from a record high of about $69,000.

Some experts warn that the crypto market could be heading toward a downturn soon, as heightened regulatory scrutiny and intense price fluctuations dampened bitcoin’s prospects.

Regulators are cracking down on cryptocurrencies too. China completely banning all crypto-related activities and U.S. authorities are also clamping down on certain aspects of the market.

In a Thursday note, Oanda’s Moya had predicted that bitcoin could tumble below $40,000 as Russia’s central bank had proposed a ban over the use and mining of cryptocurrencies on Russian territory, claiming the digital currency poses a risk to “financial stability and monetary policy sovereignty.”

Russia is among the top three countries for bitcoin mining, he noted.

— CNBC’s Ryan Browne contributed to this report.

— Correction: This article has been updated to reflect that bitcoin’s all-time high in November was about $69,000. CNBC

[MongiIG]

BITCOIN (BTC/USD) ANALYSIS:

• Robinhood rolls out crypto wallet and El Salvador to provide crypto loans to SMEs
• Bitcoin and other cryptos plunge below 40k as global risk sentiment sours
• Bitcoin (BTC/USD) key technical levels analyzed

 

 

EL SALVADOR’S CRYPTO LOANS AND ROBINHOOD TO OFFER CRYPTO WALLETS

In other news, El Salvador’s National Commission for Micro and Small Enterprises (Conamype) communicated its plans to offer Small and Medium Enterprises (SMEs) $10m in crypto-based loans in Q1 of 2022. It’s been reported that 86% of businesses in El Salvador operate on an informal basis without access to banking services. The new crypto loans are said to charge up to 10% in interest which is significantly lower than alternative finance charges currently.

Additionally, Robinhood is set to offer crypto wallets to 1,000 customers from a waiting list to test the new, unreleased version of the product. The waitlist is reported to boast more than a million users with access to the wallet set to be expanded to 10,000 clients in March due to popular interest.

Cryptos Continue Lower but with Greater Impetus

The top cryptocurrencies, measured by market capitalization, continued the larger sell-off but with greater vigor, during the Asian session.

Top 10 Cryptocurrencies, Highlighting 24 Hour Declines

Source: CoinMarketCap,

A major source of not only the crypto decline but also the wider global sell-off can be attributed to the ongoing talks between Russia and the US.

US Russia Talks Resume Today – Global Risk Impact Likely

Today, top US and Russian diplomats are due to meet in Geneva in an attempt to solve the current impasse of last week’s crucial talks – the result of which is likely to have an impact on global risk assets, which includes Bitcoin.

BITCOIN (BTC/USD) ANALYSIS AND KEY TECHNICAL LEVELS

Bitcoin began the year around the 45,650 mark after trading in a rather sideways manner throughout December. Price then broke below the channel of consolidation and has continued lower ever since plagued by relatively lower volatility until last night.

A shift in risk sentiment as Russia, Ukraine and US talks have thus far failed to allay concerns of a Russian invasion and subsequent NATO response. This morning we have seen lower equity markets in Europe, softer JPY and CHF crosses and lower treasury yields in what appears to be a global risk aversion play, at least for the time being.

The chart appears bearish upon first inspection. The largely talked about ‘death cross’ has come into fruition as prices broke 40k with the nearest level of support at 37,325 with little in the way before the psychological 30,000 level; followed by the key zone of support around 29,000.

While the posture of the market appears bearish, the MACD reveals less momentum in the latest decline compared to the prior test of 40k. Additionally, the RSI has just entered oversold territory suggesting a pullback may be due in the coming days. That being said, the current bearish trend remains intact until proven otherwise.

Bitcoin (BTC/USD) Daily Price Chart

Source: IG, prepared by Richard Snow

 

Written by Richard Snow for DailyFX.com. 21st Jan 2022

[madara99]

Shall we buy ?

[MongiIG]

36 minutes ago, madara99 said:

Shall we buy ?

Hi @madara99

Have a look at these two articles of our analysts technical analysis and outlook for Bitcoin from this week:

Link - Bitcoin Outlook: Bitcoin Battle Lines Drawn- BTC/USD Breakout Levels

What is your view on Bitcoin – bullish or bearish? Share your thoughts and analysis thanks.

 

All the best - MongiIG