Bitcoin (BTC-USD), Ethereum (ETH-USD) and a raft of major cryptocurrencies are facing more selling pressure Monday morning as investors’ risk appetite narrows.
As U.S. stock market index futures imply a weaker opening, bitcoin (BTC-USD -2.9%) is sliding to $39.31K and ether (ETH-USD -3.7%) is drifting down to $2.93K. On a technical basis, while Bitcoin (BTC-USD) has been trading in a six-month cyclical decline, it’s “not close to an oversold reading,” and $35K support probably won’t hold, said John Roque, technical analyst at 22V Research, in a note to clients Sunday, as reported by Bloomberg. “We continue to believe that it will get to the $30,000 level,” he highlighted.
It appears that investors are shifting their focus to safe haven assets such as Gold (XAUUSD:CUR +1.0%) in a backdrop of tighter monetary policy and geopolitical tensions. Gold is approaching $2K per ounce again, recently changing hands around $60 below its all-time high of $2,089 in Aug. 2020.
Over the past year, it’s clear that Gold (XAUUSD:CUR) +12% has been outpacing Bitcoin (BTC-USD) -30%, the stock market (SP500) +8%, and headline consumer price inflation +8.5% Y/Y, implying that the precious metal is acting as an efficient store of value amid economic uncertainty and recession risks. In an effort to tame inflationary pressures, the Federal Reserve is pivoting to hawkish policy, with expectations that the Fed will hike the policy rate aggressively throughout this year and next.
Cryptos that are dipping the most include: solana (SOL-USD -4.4%), avalanche (AVAX-USD -4.7%), dogecoin (DOGE-USD -4.9%), polkadot (DOT-USD -5.1%), shiba inu (SHIB-USD -5.1%), polygon (MATIC-USD -3.3%), NEAR protocol (NEAR-USD -3.3%), litecoin (LTC-USD -6.1%), uniswap (UNI-USD -5.1%), bitcoin cash (BCH-USD -8.4%), stellar (XLM-USD -4.9%) and ethereum classic (ETC-USD -5.9%).
On April 14, SA contributor Dividend Seeker said the correlation between stocks and cryptos have strengthened, which “limits the effectiveness” of Bitcoin as a hedge during times of uncertainty.
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