- Bitcoin, the world’s largest cryptocurrency by market cap, has now shed close to 10% over the past 4 days.
- The MACD, a technical indicator known as the moving average convergence divergence, also flashed a warning sign by turning negative for the first time in weeks, which for some technical watchers, is a sign Bitcoin may continue to come under pressure.
Bitcoin, the world’s largest cryptocurrency by market cap, has now shed close to 10% over the past 4 days, held back by a bout of risk aversion in global markets on jitters over tightening U.S. Federal Reserve monetary policy.
Ether, the second-largest cryptocurrency by market cap, slipped also, and smaller tokens like Avalanche and Cardano have lost more than 5%.
Because of the Fed’s commitment to raising interest rates further and drain liquidity, faith in the global equity rebound from June’s bear-market lows is starting to show signs of wavering.
Global equities retreated on Monday, keeping the pressure on cryptocurrencies given the correlation between the two asset classes and ending a recent trend where digital assets were starting their tentative decoupling from traditional ones.
The MACD, a technical indicator known as the moving average convergence divergence, also flashed a warning sign by turning negative for the first time in weeks, which for some technical watchers, is a sign Bitcoin may continue to come under pressure.
But perhaps the most obvious headwind for Bitcoin is a resurgent U.S. dollar which has been rising to its highest level in over a month.
A strengthening greenback and the prospect of fresh rate increases will all conspire to make any rebound in cryptocurrencies short-lived.
