The largest digitalย currency by marketย cap sank below $26.2K early Wednesday after disappointing Unitedย Kingdom inflation data.
After two weeks of flatlining, cryptocurrency markets eventuallyย endured a little change of pace as investors spooked by Unitedย Kingdom inflation and the latest Janet Yellen warning about the Unitedย 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 Unitedย States central bankers divided on a toย continue of interest price hikes did little to boost market confidence.
Bitcoinย (BTC) was recently currentlyย worth about $26,440, off approximately 3 percent inย theย previous 24 hours and near its weakestย point since May 12 when the largest digitalย currency by marketย cap dipped below $26,000. In this period, Bitcoin has been slogging through low volumeย ofย trading and volatility as markets wrestle with the prospect of a Unitedย States Government unable to pay its debts and ongoing cryptocurrency regulatory and macroeconomic uncertainties. Until Wednesday, Bitcoinย (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 โ increased tension in financial marketsโ had buffeted equities and digital assets.
โ Unitedย 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 isย still seen any progress in these negotiations,โ Lienkha wrote. โAll this uncertainty forces financial institutions to restructure assets and prepare for a possible default, which puts additional pressure on participants in financial markets.โ
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 cryptoย token of the Solana (SOL) smart contracts platform tumbling greaterย than 5.2 percent and 3.6%, respectively. The CoinDesk Market Index, a measure of cryptocurrency markets performance, dropped 2.8%. The CoinDesk Bitcoinย (BTC) Tendency Indicator remained in downtrend territory, where it recently dropped โ a reflection of the sliding investor optimism. A number of analysts believe that Bitcoinย (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 overย recentย months but Yellenโs third caution theseย 30ย days that the Unitedย States could โrun out of moneyโ without a debt limit agreement seemed to sweep up all assets.
Earlier Wednesday, cryptocurrencies plunged after the U.K.โs 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 Englandโs monetaryย 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 โThe Cryptocurrency Trader,โ pointedย outย that Bitcoinย (BTC) had recently maintained more of a connection to the price of gold, a traditional safe haven investment. Onย theย otherย hand, he alsoย mentionedย that Bitcoin still lacked some consistent motivation to account for investor decisions about buying and selling.
โWe still havenโt found a reason why everybody hasย toย have a goal rather we have found a number of reasons,โ Goodman stated. โThe only challenge is people havenโt coalesced on one main narrative. Weโre waiting for events, for aย type of catastrophe to befall the world economy, such as the Unitedย States dollar collapsing. And then, ofย course, everybody would coalesce around one narrative.โ
James Rubin.
