Bitcoin continues to trade in a tight range of $18,000 to $24,000, keeping investors nervous about where the price will go next. The crytpo market has been plagued by a number of problems from collapsing projects to bankruptcy.
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The value of the entire crypto market also dropped below $1 trillion as cryptocurrencies across the board sold off.
Bitcoin was trading around $18,812.36 at 03:50 a.m. ET, down more than 5%, according to CoinDesk. Etheroutstripping bitcoin’s gains in recent months, down more than 8% at $1,518.59.
Central banks around the world are fighting rampant inflation with tight monetary policies. The US Federal Reserve has made a series of rate hikes totaling 2.25 percentage points. The market is waiting interest rates continue to rise.
Bitcoin has traded in correlation with stocks and so if they fall, in general, so will cryptocurrencies.
“The macro environment also continues to prove difficult with the dollar continuing to stay high. This affects all risk assets as we can see,” said Vijay Ayyar, vice president. international and corporate development at crypto exchange Luno, told CNBC.
“If we see the dollar start to fall again, then we should be able to get risk assets like bitcoin up again.”
The crypto market has been battered this year with nearly $2 trillion written off since peaking in November. Bitcoin is down about 60% from its record high of $68,990.90. achieved in November.
The sell-off is due to the difficult environment for risk assets as well as crypto-specific issues including Project collapses and bankruptcies have spread in the industry.
Bitcoin has been trading in a tight range of $18,000 to $24,000 since June. Luno’s Ayyar said that when bottoms are formed, “bitcoins usually like to go back and test previous lows to see if they’re going to hit the bottom.” be kept as support or not.”
He said that unless bitcoin drops below $17,500, the market is likely to consolidate in the $18,000 to $24,000 range.
Meanwhile, ether and so-called altcoins, or altcoins, have managed to outperform bitcoin. Ether has outperformed bitcoin since both cryptocurrencies hit their lows in June.
Ether is the native cryptocurrency on the Ethereum network. Ethereum is planning a major upgrade this month – called consolidation – proponents say will make the network more efficient.
“Ethereum hits yearly highs against bitcoin pair in anticipation of consolidation,” Ayyar said. “Therefore, there has been more interest and activity in the Altcoin space, while Bitcoin consolidates.”