Bitcoin (BTC) surged towards $40,000 following a major retracement in the stock on April 22 following the latest bulls move.
Bitcoin drops $3,000 as US stocks fall
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD was held firmly below $41,000 on Friday after volatility during the latest Wall Street trading session.
On Thursday, United States markets saw a “rising” reaction in Treasury yields, with the Nasdaq 100 down 2% and the highly-correlated crypto taking down with it.
US stocks have fallen dramatically as yields rise. The Nasdaq 100 fell 2% as US 10y yields rose 7bps to 2.9%. pic.twitter.com/vlgaW9F62C
— Holger Zaschaepitz (@Schuldensuehner) 21 April 2022
With this, Bitcoin lost more than $3,000 in a matter of hours, losing around $39,800 before recovering.
Meanwhile another macro trigger came in the form of a shrink in the Federal Reserve’s balance sheet, which was finally underway. Even for stressed stocks and riskier assets, the move was worth a long time to tackle forty years of record inflation, but this was not visible in the figures so far.
“It seems that Fed balance sheet expansion has stopped shortly before reaching the $9tn mark,” market commentator Holger Zschaepitz Abbreviation same day.
“The Fed’s net assets are reduced by $9.6bn to $8,955.9bn. The balance sheet now accounts for 37.3% of US GDP versus 83% of the ECB and 137% of the BoJ.”
As Cointelegraph reported, the European Central Bank (ECB) has yet to show signs of shrinking its balance sheet, which itself stands at close to $10 trillion.
Comments from Fed Chairman Jerome Powell, pointing to more key interest rate hikes for May, served to add additional excitement to sentiment.
Crypto traders thus remained cautious, with many noting that the week’s run was not with suitable volume with around $43,000 suggesting that its legitimacy was questionable from the start.
Popular Twitter trader Roman, “Low volume pumps are not to be trusted. They are used for distribution or to keep sellers under control.” warning,
“We’ve seen several examples of low volume pumps over the past 6 months all failing at major resistance. Be careful.”
That six-month period has seen bitcoin bulls fail to move past a hard trading range, despite several surges within that range.
Ethereum risk $2,600 . returns to
Meanwhile Thursday’s passage caused additional pain for the altcoin, with Ether (ETH) falling below $3,000.
RELATED: GBTC premium nears 2022 high as SEC faces calls to approve bitcoin ETF
In classic fashion, the top ten cryptocurrencies by market cap copied bitcoin’s weakness with daily losses of around 4%.
For trader and analyst Rect Capital, the Ethereum retest was crucial, opening the doors for a deeper decline towards $2,600.
can $ETH Dip to $2600 this month?
Finally, September’2011 has shown how volatile retests of the black ~$3000 level can be on the downside (Chart 1)
Revisiting ~$2600 Might Still Be a Possibility If #ETH Weekly closing below the ascending triangle top (Chart 2)#crypto #ethereum pic.twitter.com/2cUq9lZvBG
— Rect Capital (@rektcapital) 21 April 2022
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, so you should do your own research when making a decision.
