Rising interest rates are giving individual and institutional investors pause for thought about the crypto market outlook, according to Edul Patel, chief executive officer of Mudrex, an algorithm-based crypto investment platform. Bitcoin’s more than 30 per cent decline in 2022 compares with a retreat of more than 10 per cent in global bonds and shares, and a 2.5 per cent advance in gold.
“The downward trend is likely to continue for the next few days,” he said, adding Bitcoin could test the $US30,000 level.
“We’re seeing a slow motion meltdown, partially because it’s mostly been long holders selling” instead of levered liquidations, said Josh Lim, head of derivatives at New York-based brokerage Genesis Global Trading. “Now that some corporate treasuries are hovering near their cost basis, markets are waiting and watching to see if shareholders will force some de-risking.”
Bitcoin’s recent decline puts it at risk of firmly dropping out of the range where it’s been trading in 2022, completely reversing the most recent bull run that drove the token to a record of almost $US69,000 in November. With its 40-day correlation with the S&P 500 stock benchmark at a record 0.82, according to data compiled by Bloomberg, any further hit to equities sentiment would risk dragging Bitcoin down as well.