Bitcoin Lingers near September Lows Amid Drop of 40% from Record

Bitcoin Lingers near September Lows Amid Drop of 40% from Record

Bloomberg

Bitcoin traded near the lowest levels since September after an earlier swoon extended its weeks-long decline from an all-time high to about 40%.

The largest cryptocurrency by market value fell as much as 4.9% to $41,008 before stemming the decline during US trading hours. It hit a record of almost $69,000 on November 10. Ether, the second-largest, dropped as much as 9% to its lowest level since September 30. Both of those tokens, as well as others including Binance Coin, Solana, Cardano and XRP are down more than 10% in the past seven days, according to CoinGecko.

“Bitcoin and crypto are acting like risk assets right now,” said Callie Cox, investment analyst with eToro. “Investors are viewing Bitcoin as a play on the economic outlook, and right now that’s pretty murky.”

The retreat comes after minutes from the Federal Reserve’s December meeting, published, flagged the chance of earlier- and faster-than-expected rate hikes as well as potential balance-sheet rundown.

“The Fed’s intention to reduce the balance sheet in Q1 2022 is the primary cause of this sell-off,” Fundstrat strategists said in a note Thursday. “Unfortunately, no immediate support looks likely ahead of September 2021 lows at $39,573, with breaks of that leading down to last summer’s May-July bottom.”