2 - 4 minute read
Bitcoin investors were met with a volatile market on Wednesday, with the cryptocurrency sinking below $27,100 after experiencing a 2.2% decrease in value over the previous 24 hours. The market turbulence was brought about by hawkish comments from Loretta Mester, Cleveland’s Federal Reserve Bank President, who indicated that the Fed’s year-long streak of rate increases may not be coming to a halt anytime soon. Mester’s comments, coupled with dispiriting Chinese manufacturing data, led to a bearish sentiment in the market.
Mikkel Morch, chairman and non-executive director at crypto investment fund ARK36, noted that Mester’s remarks have had a disruptive impact on various risk assets, including cryptocurrencies. Morch added that the release of discouraging manufacturing data from China has added to the bearish sentiment surrounding bitcoin and other risk assets.
The debt ceiling was also a cause of concern for crypto investors as bitcoin whales reduced their holdings and sent their assets to exchange before House members approved a bill to raise the debt ceiling. The uncertainty surrounding the US government’s ability to meet its financial obligations and extend the debt limit has contributed to the decline in the crypto market’s performance.
Despite the market turbulence, Dave Weisberger, the CEO of CoinRoutes, which provides algorithmic trading strategies in the crypto space, noted that bitcoin holding is at an all-time high while BTC to be sold on exchanges and volume on exchanges are at low levels. Weisberger said that the trends tell you “that speculators are moving into pricing and moving out but the long-term buyers seem happy to buy in this below $27K range and cushion in any downdraft. So it feels like we’re in the bottom of a trading range.”
The Bottom Line
In conclusion, the crypto market experienced a decline in value following hawkish comments from the Federal Reserve Bank President and dispiriting Chinese manufacturing data. The debt ceiling issue also contributed to the market turbulence, and uncertainty about the U.S. government’s ability to meet its financial obligations continues to be a cause of concern for crypto investors. However, the long-term buyers seem to be happy to buy in this below $27K range, and this could indicate that the market is in the bottom of a trading range.