The fall was driven by forced selling of crypto positions and wider worries in financial markets. Bitcoin and other cryptocurrencies fell sharply on Wednesday as heavy selling hit the crypto market.
The $550 million liquidation wave, higher oil prices, rising US bond yields and uncertainty over the Fed are all adding pressure to the market. For now, the Bitcoin decline is being driven by a mix of forced crypto liquidations and wider concerns about global risk.
Brent crude climbed above $101 a barrel, adding to worries about inflation and the wider global economy, according to Bloomberg. US stock futures were little changed after the S&P 500 closed at a record high in the previous session, while Europe’s Stoxx 600 ended a three-day winning streak. Pratik Kala, a portfolio manager at Apollo Crypto, said Bitcoin could revisit the $78,000 level if it falls below $83,000.
Rachael Lucas, an analyst at BTC Markets, said a hawkish reading could push Treasury yields and the US dollar higher, which could hurt risk assets. Oil prices rose as concerns about the Strait of Hormuz increased. The weakness was not limited to cryptocurrencies. A more hawkish message from the Fed could put further pressure on Bitcoin and other risky assets. Crypto trading could remain unstable for the rest of the week if there is no major new market catalyst.
