The cryptocurrency market is known and criticized (by some) for its increased volatility. A good example of this was the price drop in the last 12 hours or so that resulted in almost $1 billion in liquidations.
Bitcoin was among the least affected assets, but its price still fell from around $71,000 to $65,000 before recovering to around $67,000.
Volatility in all markets
However, the altcoins crashed sharply, recording numerous double-digit declines in a matter of hours. But declines were seen even in more mature sectors, such as in the US stock markets, where the S&P 500 fell from over 5,210 to below 5,100 within minutes, as did the Dow Jones Industrial Average and the Nasdaq Composite.
Even gold, arguably the asset best known for its stability amid crises and lack of volatility, fell 4% from its all-time high of $2,433 to $2,333 in a matter of hours.
Before that, the precious metal was on the rise, especially since it climbed well above the $2,000 mark at the beginning of the year. Geopolitical tensions in Europe and the Middle East fueled further gains, but the inclusion of Iran led to massive price increases that pushed gold to the aforementioned peak price against the dollar.
XAUUSD. Source: TradingView
However, all markets appear to have been affected by recent comments from various senior Federal Reserve officials. Raphael Bostic, president of the Federal Reserve Bank of Atlanta, and San Francisco President Mary Daly were among those who predicted a delay in the central bank's possible turnaround from its current monetary policy.
Both industry presidents quickly refuted rumors that the Fed would soon begin cutting interest rates. Daly noted that “there is still a lot of work to be done” and that there is “absolutely” no urgency to lower rates.
Outlook on the crypto market
While these comments should indeed lead to volatility in riskier markets like crypto or even Wall Street, gold should actually be spared. Additionally, its price could rise against the dollar following such comments due to its safe-haven status.
However, the greenback actually rose against other currencies. Because higher interest rates lead, at least theoretically, to fewer loans and less cheap money.
Nevertheless, the crypto market is still deep in the red compared to the day, but has recovered somewhat since the lows last night. After all, more than $250 billion left the market within a few hours, but there are some promising signals for the next few weeks. Most importantly, the Bitcoin halving is scheduled to take place in a few days, an event that, at least historically, is considered the trigger for a new bull run.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.