- Despite the selling wave seen on Wall Street yesterday, Bitcoin and other cryptocurrencies remained unchanged or slightly increased amidst the broader market fluctuations.
- While the Dow Jones Industrial Average fell by 1.1% on Tuesday and the S&P 500 retreated by 1.5% – both indexes were attempting to mitigate losses – digital assets did not show much excitement.
- Tuesday’s stock market sell-off came amid macroeconomic pressures that should have affected digital assets. Investors are concerned that interest rates will remain elevated for longer than previously thought.
Following the turbulence in the stock markets, Bitcoin prices are showing resistance, but this may have a negative reaction in the near future!
Despite Challenges, Bitcoin Price Continues to Rise
Despite the selling wave seen on Wall Street yesterday, Bitcoin and other cryptocurrencies remained unchanged or slightly increased amidst the broader market fluctuations. This could be a sign that Bitcoin is either in a dull phase or that challenging times might be approaching for cryptocurrencies.
Bitcoin’s price increased by over 0.5% to around $26,400 in the past 24 hours. The largest digital asset comfortably resides in the $26,000 range, a region it has rarely been disturbed in for over a month, where short-term fluctuations are quickly reversed.
FxPro broker analyst Alex Kuptsikevich stated, “The crypto market remained calm despite the storm in stocks.” Indeed, while the Dow Jones Industrial Average fell by 1.1% on Tuesday, and the S&P 500 retreated by 1.5% – both indexes were attempting to mitigate losses – digital assets did not show much excitement. This could be a sign of Bitcoin experiencing its lowest period of volatility in history, as interest from investors has waned in recent months, leading to multi-year or even record lows in volatility and trading volume, depending on metrics.
Stock Market Turmoil May Pose Challenges for Bitcoin
Kuptsikevich said, “Bitcoin is in the lowest volatility period in the history of the asset. The crypto market is clearly in a quagmire.” On the other hand, stock market weakness may not bode well for Bitcoin. Kuptsikevich stated, “The crypto market hasn’t suddenly become a safe haven.”
Tuesday’s stock market sell-off came amid macroeconomic pressures that should have affected digital assets. Investors are concerned that interest rates will remain elevated for longer than previously thought. This trend will exert more pressure on stocks and cryptocurrencies, further challenging these assets that have experienced significant declines since the Federal Reserve raised borrowing costs last year. High interest rates tend to discourage investments in riskier bets like Bitcoin when risk-free cash or U.S. Treasury bonds offer attractive yields.
Moreover, signs of increased fear among crypto traders are emerging. The Crypto Fear and Greed Index dropped to 44 on Wednesday, falling below 50, the “fear” territory, and down from 46 on Tuesday and 47 last week.
Outside of Bitcoin, Ethereum was trading slightly above $1,600. Smaller tokens or altcoins were weaker, with Cardano falling by 1% and Polygon losing 2%. Meme coins appeared calmer, with Dogecoin gaining less than 1% while Shiba Inu lost ground.
