Bitcoin Dips Below $42,000 After Rate Pause
Bitcoin has dipped below $42,000, erasing the gains it made after the U.S. Federal Reserve announced its rate pause. The cryptocurrency is set to close the week lower, breaking eight consecutive weeks of positive returns. As of 12:10 p.m. ET, Bitcoin fell over 2% in the past 24 hours to $41,991.
The pullback caused nearly $16 million worth of long liquidations, while only around $8 million short positions were wiped out, according to Coinglass data.
Bitcoin’s Correlation with Stocks Weakens
Despite a positive mood in traditional markets, Bitcoin’s price action remains muted. This raises questions about its tendency to move in sync with major equity indices. Wall Street continues its uptrend following the Fed’s decision to pause rates. Major equity indices suggest investors are considering the possibility of rate cuts in 2024, with a 65% chance of a rate cut in March according to the CME FedWatch tool. The Nasdaq is up 0.4%, the S&P 500 is flat, and the Dow Jones Industrial Average increased by 0.1%.
About Author
Brian McGleenon is a UK-based markets reporter for The Block. He has worked as a financial journalist and producer for multiple news outlets over the years, such as Fuji Television, The Independent, Yahoo Finance, The Evening Standard, and The Daily Express. Brian is also a screenwriter and producer with one feature film produced and one in development with Northern Ireland Screen. Apart from web3 and cryptocurrency developments, he is also interested in geopolitics, environmental issues, artificial intelligence, and longevity research.
Hot Take: Bitcoin Retraces Gains After Fed Rate Pause
Bitcoin has experienced a dip below $42,000 following the U.S. Federal Reserve’s decision to pause rates. This reversal has put an end to eight consecutive weeks of positive returns for the cryptocurrency. The muted price action of Bitcoin in contrast to the buoyant traditional markets raises concerns about its correlation with major equity indices. While Wall Street continues its uptrend, investors are now factoring in the possibility of rate cuts in 2024. Despite this, Bitcoin’s correlation with stocks seems to be weakening. It remains to be seen how these factors will impact the future performance of the cryptocurrency.
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