What Happened: Bitcoin and Ethereum both declined more than 6% amid a wider rout in the cryptocurrency market on Wednesday.
Cryptocurrencies followed stocks lower intraday after upcoming rate hikes once again took center stage.
San Francisco Federal Reserve President Mary Daly told CNBC she supports raising rates aggressively until inflation comes down reasonably.
“We need to do that expeditiously, and I see a couple of 50 basis point hikes immediately in the next couple of meetings to get there,” said Daly, according to a CNBC report.
The Nasdaq was down 0.7%, while S&P 500 declined 0.75% on Wednesday. At press time, S&P 500 and Nasdaq futures were down 0.04% and 0.01%, respectively.
Bitcoin’s decoupling from stocks could happen, but it depends on what institutional investors think, said OANDA Senior Market Analyst Edward Moya.
“Bitcoin continues to follow what happens on Wall Street, but that may change if more institutional investors believe that the crypto bottom has been made,” said Moya, in a note seen by Benzinga.
Market intelligence platform Santiment tweeted that Bitcoin and Ethereum gave up weekend profits after the S&P 500 wobbled.
Santiment said that the “profitability line” on the 30-day market-value-to-realized-value (MVRV) — a ratio of Bitcoin’s market capitalization versus its realized capitalization — had been crossed, indicating that risk had temporarily jumped higher.
Cryptocurrency trader Michaël van de Poppe said Bitcoin needs to hold just above the $31,000 level to have a test at $33,000 or it is going to nosedive quite fast to the $29,000 mark. The analyst noted in a subsequent tweet that the levels were breached and many altcoins too were at “crucial levels” of support.
Yep, done probably now. Many #altcoins at crucial levels of support too.