Bitcoin Fears is Causing the Stock Market To Run Volatile This Week

Bitcoin Fears is Causing the Stock Market To Run Volatile This Week by wsjdigitalsubscription

Confidence in digital assets seemed to be improving, but cryptocurrencies were down on Monday. A week full of macroeconomic news could mean that cryptocurrencies experience volatility in the coming days.

Bitcoin fell to a price of $16,200 in the last hours, about 2%, but it remains above the lows of $15,500 reached in the last two years. The total failure of FTX is weighing heavily on the market since its bankruptcy and with the possible collateral effects.

AvaTrade analyst Naeem Aslam said that “Bitcoin had a rough week as rumors continue to circulate that more major breakouts are coming following the FTX crash” “However, traders are finding some solace in the news that people, as the CEO of Binance they are actually putting more money into the ecosystem,” mentioning Binance’s plans to create a bailout fund of at least $1 billion.

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The Crypto Fear and Greed Index indicated fear by marking a 28 on Monday, contrary to what appears to be an improvement since the index marked 2 records out of 20; this indicated extreme fear since FTX concerns began.

Cryptocurrency exchanges continue to see low trading volumes; at the same time, Wall Street and traditional investors are betting against any recovery in Bitcoin prices. And at the moment, we have no relevant news about the crypto market.

With high inflation and rising interest rates curbing demand for risk-sensitive assets, Bitcoin has been highly correlated with the Dow Jones Industrial Average and S&P 500 indices this year. Cryptocurrencies fell at the same time as stocks on Monday after key economic data was released. With the data still to be released this week, it will surely affect the major indices dragging Bitcoin along.

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Pending data like the US jobs report for November, due out on Friday; the Fed’s preferred inflation metric, to be released on Thursday and others. Bitcoin may have a hard time picking an address until those numbers come through, said Yuya Hasegawa, an analyst at cryptocurrency exchange Bitbank.

Ether, the second-largest cryptocurrency, fell 4% to $1,150 amid signs a major holder may be preparing to dump the token. Recently, an Ether holder transferred more than 70,000 tokens worth about $85 million to Binance; according to blockchain analyst Lookonchain, this movement may indicate that a sale is coming on the exchange.

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