Falling Stocks Demoralize Crypto Buyers

Market picture

Bitcoin lost 1.9% in the past 24 hours, falling back to $19,000 amid falling stock indices and strengthening US Dollar. BTCUSD has returned to last Monday’s lows and is testing the lower end of the trading range, where there have been numerous upside reversals over the past four months.

In theory, the bears have a better chance this time around, as the cryptocurrency market has undergone an extended consolidation, ceasing to be locally oversold. That said, the Nasdaq index had updated more than two years overnight, which could further demoralize crypto bargain hunters.

According to CoinShares, investments in crypto funds fell last week after three weeks of small inflows. Outflows amounted to $5 million. Investments in Bitcoin increased by $12 million. Investments in funds allowing bitcoin shorts fell by a record $15 million. Trading volumes remain historically low; investors are waiting for signals that the Fed is ready to revise its hawkish monetary policy, CoinShares noted.

News Background

The mining difficulty of the first cryptocurrency has set a new high at 35.61T after a new recalculation. The 13.55% one-shot increase was the largest since May 2021. According to Glassnode, the network’s hash rate (smoothed by the 7-day moving average) is nearing the all-time high of 257.9 PE/ s recorded on October 6th.

According to Santiment, crypto whales have increased their investment in the first cryptocurrency by 46,200 BTC over the past two weeks.

Billionaire and founder of hedge fund Tudor Investment, Paul Tudor Jones, said he continues to hold his investments in the first cryptocurrency due to Fed policies.