Oct 20, 2022
VOT Research Desk
Market Insights and Analytics
Bitcoin and other cryptocurrencies fell on Thursday as bond yields reached new multi-year highs and investors’ appetite for risk decreased across markets.
In the last 24 hours, the price of Bitcoin has decreased by less than 1% to $19,100.The largest cryptocurrency briefly fell below the crucial $19,000 level, but it rebounded to return to the trading range of $19,000 to $20,000, which it has held since the beginning of September despite an unusual lack of volatility.
The strong dollar trade is being fueled by a significant move in yields, which is keeping cryptos grounded. Bitcoin continues to hold the $19,000 level despite a solid move higher with yields. The resilience of bitcoin has been impressive, but it will likely be put to the test in the coming weeks.
This year, amid a gloomy macro outlook of high inflation, rising interest rates, and the risk of a recession, digital assets have strengthened their strong correlation with stocks. Risk-sensitive assets have been hit hard by this environment, and Bitcoin has fallen along with the Dow Jones Industrial Average and S&P 500.
Cryptocurrencies fell on Thursday as the stock market took a negative turn. Investors’ optimism, which had been fueled by strong corporate earnings in recent days, appears to have diminished, and concerns about central bank policy and rates have returned to the forefront. Bond yields have risen as a result, putting more pressure on risky bets. Assets with more risk, like Bitcoin, are less appealing due to higher yields on government bonds, which investors consider to be safe havens.
At one point on Thursday, the yield on the 10-year U.S. Treasury note exceeded 4.17 percent—the highest level since 2008.
However, Bitcoin buyers still took advantage of drops below $19,000, like the one on Thursday, betting that cryptocurrencies have reached their bottom.
Bitcoin remains above $19,000, as it may be establishing a floor from $17,600 to approximately $19,000, before a significant relief rally to the upside.”Despite the bad macroeconomic news, the sell pressure continues to be taken into account.
Ether, the second-largest token after Bitcoin, is 1 percent to just below $1,300.Even weaker were smaller cryptocurrencies or altcoins, with Solana and Cardano down 3% and 2%, respectively.Memecoins were more mixed, with Shiba Inu down 1% and Dogecoin up less than 1%.
