Bitcoin and Crypto Tokens Struggle as Hints of Higher Rates Dent Market Sentiments
Bitcoin and other crypto assets were encountering difficulties on Wednesday, in the wake of hints of higher rates for an extended period that were denting market sentiments. Additionally, the increase in US Treasury yields also contributed to pushing lower the riskier asset class.
Bitcoin in a Downward Trajectory
Bitcoin was back on the downward trajectory as the largest crypto token declined by about half a percent but managed to hold above the $26,000-level. Meanwhile, its largest peer, Ethereum, inched up slightly but could not surpass the $1,600-mark. The price action in the altcoins remained on the downside in the early hours.
Reasons Behind the Consolidation in Bitcoin’s Value
Bitcoin’s value had recently consolidated above the $26,100 threshold. This could be attributed to the surge in the US 10-year Treasury yield, reaching its highest level in about 16 years. According to Edul Patel, Co-Founder & CEO at Mudrex, this significant increase in interest rates has had a similar impact on the equity markets.
Crypto Market Performance
With a few exceptions, all top crypto tokens were trading lower on Wednesday. Polygon dropped about 3 percent, while TONcoin and Solana declined more than 2 percent each. Polkadot, Litecoin, and Shiba Inu were also down by a percentage point each. The global cryptocurrency market cap was trading slightly lower, falling to the $1.05 trillion mark. The total trading volumes plunged about 15 percent to $19.47 billion. Among the gainers, Dogecoin and BNB rose about a percent each.
Tech View by Giottus Crypto Platform
According to the Giottus Crypto Platform, Bitcoin (BTC) is consolidating just below its key moving averages after failing to decisively breach them earlier this month. Its RSI is in neutral territory with a 5-year low in trade volume on exchanges, indicating a wait-and-see approach by long-term investors.
Outlook for Bitcoin
The asset needs to take out the $28,200 level around its 100-day moving average to maintain a bullish bias leading into Q4 this year. The key psychological support zone at $25,000 has been held successfully in the recent past. However, a drop further down to $23,500 can’t be ruled out if volumes weaken further.
Final Thoughts
The challenging midweek for Bitcoin and other crypto tokens revealed the impact of hints of higher rates for a prolonged period and the rise in US Treasury yields. The market performance was subdued, leading to consolidation and a wait-and-see approach by long-term investors in the crypto market.
I have been featured in numerous publications, both online and offline, and am a regular speaker at industry events. I am also the founder of Crypto University, an online educational platform that helps people learn about cryptocurrencies and blockchain technology. In addition to my writing and teaching career, I am also an active investor in the cryptocurrency space. I have made investments in some of the leading projects in the space, and my portfolio has outperformed the market by a wide margin