The largest digital currency by market cap sank below $26.2K early Wednesday after disappointing United Kingdom inflation data.
After two weeks of flatlining, cryptocurrency markets eventually endured a little change of pace as investors spooked by United Kingdom inflation and the latest Janet Yellen warning about the United States debt ceiling stalemate sent prices reeling on Wednesday.
The release of the most up-to-date Federal Open Market Committee (FOMC) minutes thereafter in the day showing United States central bankers divided on a to continue of interest price hikes did little to boost market confidence.
Bitcoin (BTC) was recently currently worth about $26,440, off approximately 3 percent in the previous 24 hours and near its weakest point since May 12 when the largest digital currency by market cap dipped below $26,000. In this period, Bitcoin has been slogging through low volume of trading and volatility as markets wrestle with the prospect of a United States Government unable to pay its debts and ongoing cryptocurrency regulatory and macroeconomic uncertainties. Until Wednesday, Bitcoin (BTC) had remained in a $26,500 to $27,500 range.
In an email to CoinDesk, Ruslan Lienkha, chief of markets at fintech platform YouHodler, wrote that “ increased tension in financial markets” had buffeted equities and digital assets.
“ United States stock indexes are under selling pressure by raised concerns about a possible default of the US: With just about 10 days left for authorities to reach some agreement, we have not is still seen any progress in these negotiations,” Lienkha wrote. “All this uncertainty forces financial institutions to restructure assets and prepare for a possible default, which puts additional pressure on participants in financial markets.”
Ether was recently changing hands at about $1,808, off approximately 2.6 percent from Tuesday, same time. Most major cryptocurrencies spent Wednesday firmly in the red with LTC and SOL, the crypto token of the Solana (SOL) smart contracts platform tumbling greater than 5.2 percent and 3.6%, respectively. The CoinDesk Market Index, a measure of cryptocurrency markets performance, dropped 2.8%. The CoinDesk Bitcoin (BTC) Tendency Indicator remained in downtrend territory, where it recently dropped – a reflection of the sliding investor optimism. A number of analysts believe that Bitcoin (BTC) will remain stuck until a new catalyst emerges.
Major stock indexes struggled similarly on Wednesday, restoring at least temporarily the correlation betwixt equity and cryptocurrency pricing with the tech-focused Nasdaq, S&P 500 and Dow Jones Industrial Average (DJIA) all dropping the better part of a percentage point. The two investment classes have been traveling increasingly different paths over recent months but Yellen’s third caution these 30 days that the United States could “run out of money” without a debt limit agreement seemed to sweep up all assets.
Earlier Wednesday, cryptocurrencies plunged after the U.K.’s latest Consumer Price Index (CPI) rose to 6.8 percent in April, over the expected 6.2 percent and its highest point since 1992. The disappointing CPI suggested that England’s monetary authority would have continuation its recent diet of interest price hikes, which have traditionally discouraged cryptocurrency markets.
In an interview with CoinDesk Television Wednesday, Glen Goodman, author of “The Cryptocurrency Trader,” pointed out that Bitcoin (BTC) had recently maintained more of a connection to the price of gold, a traditional safe haven investment. On the other hand, he also mentioned that Bitcoin still lacked some consistent motivation to account for investor decisions about buying and selling.
“We still haven’t found a reason why everybody has to have a goal rather we have found a number of reasons,” Goodman stated. “The only challenge is people haven’t coalesced on one main narrative. We’re waiting for events, for a type of catastrophe to befall the world economy, such as the United States dollar collapsing. And then, of course, everybody would coalesce around one narrative.”