Bitcoin and other cryptocurrencies were mostly weaker Wednesday as sentiment across broader markets took a hit following results from major tech companies. The next catalyst for cryptos could be the Federal Reserve decision due later in the day.
The price of
Bitcoin
has fallen1.5% over the past 24 hours to $42,850, declining after trading close to $44,000 earlier. The largest digital asset reclaimed the psychologically important $40,000 level earlier this week but still remains well below its recent peak above $48,000 that was reached amid the trading frenzy over the approval of spot Bitcoin exchange-traded funds (ETFs).
With the hype around Bitcoin ETFs fading as the new market dynamics settle, analysts are looking beyond crypto for catalysts—and this week has been chock full of them. Bitcoin, in the absence of big crypto news, has a tendency to trade in step with the stock market, moving alongside the
Dow Jones Industrial Average
and
S&P 500.
Big Tech earnings are key for the stock market this week, with investors on Wednesday digesting the latest results from
Microsoft
and
Alphabet.
Later in the day will be the latest monetary policy decision from the Fed, with a press conference from Fed Chairman Jerome Powell in sharp focus amid shifting expectations over when the central bank may start cutting interest rates.
The pathway for rates is likely to be key for cryptos, as digital assets, like stocks, are sensitive to changes in borrowing costs. Friday will usher in the U.S. jobs report for January, a leading economic indicator that could also move expectations for rates.
Beyond Bitcoin,
Ether
—the second-largest crypto—gained less than 1% to $2,320. Smaller tokens were more mixed, with
Cardano
down 4% and
Polygon
up 2%. Memecoins were in the red, with
Dogecoin
and
Shiba Inu
each down 2%.
Write to Jack Denton at [email protected]
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