Bitcoin moves towards $28,000 as world’s largest crypto extends losses
Bitcoin prices fell today, flirting with the $28,000 price level after building on their recent losses.
The world’s most valuable digital currency by market cap fell to $28,010 this afternoon, according to CoinDesk data.
At this point, it was down nearly 8% after rising to about $30,400 two days earlier, additional CoinDesk figures show.
Explaining this latest activity, analyst Tim Enneking emphasized the key role of the Federal Open Market Committee (FOMC), which has raised its benchmark federal funds rate by 475 basis points since March 2022.
This group of 12 policymakers will meet early next month, when many expect it to announce another rate hike.
“The whole world (crypto and fiat) is basically on edge waiting for the FOMC decision on May 3,” said Enneking, CEO of Digital Capital Management.
“Although the correlation between crypto and fiat has generally weakened this year, major events still cause correlation and the pending FOMC decision has halted the upward movement of crypto,” he said.
“That, plus regulatory uncertainty (SEC and Bittrex, MICA), banking woes (Silvergate, Signature) and contagion fears (banking, commercial real estate) all conspire to create a retracement after what, for BTC in particular, has been a big rally,” said he and highlighted several headwinds.
Armando Aguilar, an independent cryptocurrency analyst, also highlighted the lack of regulatory clarity, noting that major exchange Coinbase recently applied for a license in Bermuda and may move outside the US
He also cited other variables that may have fueled recent market declines, including “Large liquidation orders of BTC in major exchanges, especially Binance” and the testimony US Securities and Exchange Commission Chairman Gary Gensler gave to the House Financial Services Committee earlier this week .
However, several analysts took a different approach to the losses bitcoin has suffered in recent days, describing them as inevitable after the digital currency’s latest price surge.
“For now, this is nothing more than a healthy retracement after an extended move to the upside,” said Scott Melker, a writer, investor and analyst who hosts The Wolf Of All Streets Podcast.
Marc Bernegger, co-founder of crypto fund of funds AltAlpha Digital, also weighed in.
“I personally think that the massive gains of the past few weeks caused investors to take some profits off the table which may have been a trigger for this long squeeze,” which took place recently as the downward move prompted many traders to close their long positions.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.
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