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Bitcoin Diverges From Stocks as Fed Meeting Starts, Slips Toward $38K
It has become a rare occurrence these days but BTC went its own way, dropping on Tuesday as stocks rose.
Updated May 11, 2023, 3:49 p.m. Published May 3, 2022, 6:48 p.m.
Bitcoin (BTC) slid, continuing its thus far uninspiring start to May, as crypto traders positioned ahead of a U.S. Federal Reserve decision due Wednesday.
The largest cryptocurrency by market capitalization was down 1.2% in the past 24 hours to around $37,719, as of press time.
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A major market talking point in recent weeks has been bitcoin's elevated correlation with U.S. stocks, especially the tech-focused Nasdaq 100 Index. But the S&P 500 and Nasdaq were both in positive territory on Tuesday, as crypto markets appeared to suffer from negative sentiment.
- “Bitcoin is steadying ahead of the [Federal Open Market Committee] as crypto traders await to see if Wall Street has come close to pricing in peak Fed hawkishness,” said Oanda senior market analyst Edward Moya.
- Read more: Fed Meeting Decision Looks Baked, But Outlook is Far From Certain
- “Bitcoin will continue to trade as a risky asset until further progress is made with the Lightning network,” said Moya. “Bitcoin needs a fresh catalyst, and progress in the peer-to-peer payment network might be what is needed to revitalize crypto bulls.”
- “Since late March, the bears have been intensifying from $39K, forming a sequence of lower highs,” said Alex Kuptsikevich, senior market analyst FxPro. “At the same time, the basis in the form of support at $38K generally remains untouched.”
- Kuptsikevich said the crypto market seems to have “laid at the bottom.” There is a high supply of coins for sale and reluctance to “take active actions in anticipation of the Fed’s decision.”
- “According to Coin ATM Radar, the global bitcoin ATM installation rate declined for the fourth consecutive month in April,” Kuptsikevich said.
- Marcus Sotiriou, analyst at the U.K.-based digital asset broker GlobalBlock, said that “despite the fears surrounding bitcoin volatility, data from @ecoinometrics shows how bitcoin’s volatility is actually less than many tech stocks, including Apple [AAPL] and Meta [FB].”
- “It is clear that every halving leads to less volatility as the asset matures and is adopted more,” Sotiriou said.
- Ether (ETH) was down 0.07% in the past 24 hours, trading at $2,794.
- The S&P 500 was up 0.6% and the Nasdaq was up 0.1%.
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