Recently, bitcoin prices have struggled, often dipping below $43,000 and failing to post substantial gains.
Around 9:20 a.m. EDT, the world’s most popular crypto asset fell to $42,777.20, CoinDesk data show, Saturday.
The majority of cryptocurrencies traded lower early on Saturday. Global crypto market capitalization fell nearly 3% to $1.15 trillion in past 24 hours, while total crypto market volume increased 9.3% to 89.50 billions of dollars.
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Bitcoin short break at nearly $44,000
Bitcoin was able to pull back slightly soon after, hitting $43,962.01 around 10 a.m. EDT. Following this comeback, it retreated again, falling to around $42,840 at 1:30 p.m.
On the other hand, the overall stablecoin volume was $74.34 billion, or 83.06% of the total 24-hour volume of the cryptocurrency market.
Bitcoin was recently trading at an average price of around $43,500, roughly where it was 24 hours ago and well below the $47,000 barrier it broke a few days earlier, so as investors continued to weigh in on the Federal Reserve’s new hawkish zeal and the ongoing twist in economic developments sparked by Russia’s attack on Ukraine.
BTC total market cap at $805.46 billion on the weekend chart | Source: TradingView.com
Concern over the Fed’s monetary policy tightening
According to an email from Oanda Senior Market Analyst Americas Edward Moya:
“Bitcoin unsure of its direction as Wall Street frets over central bank aggressiveness in monetary policy tightening.”
Following these recent price swings, various experts have voiced their predictions about the future direction of the cryptocurrency.
Ben McMillan, Chief Information Officer at IDX Digital Assets, spoke, indicating critical levels of support and opposition.
“$43,000 is a critical short-term support level as bitcoin attempts to build on its recent relative strength,” he noted.
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Contain inflation
Cryptocurrency prices deviated somewhat from the performance of major equity markets, which were marginally positive. The Nasdaq, which is heavily biased towards the tech sector, gained less than a tenth of a percentage point.
The US central bank communicated strongly last week, both collectively and through individual governors, that it will step up its efforts to contain inflation, which has hit around 8%, a four-decade high.
The correlation coefficient between Bitcoin and US equities has increased over the past 90 days as investors have become more risk averse in response to the Federal Reserve’s withdrawal of pandemic-era intervention which is credited with catalyzing the rise of cryptocurrency.
Featured image from Research Affiliates, chart from TradingView.com
