Bitcoin Value Halves From Record High Of $69,000 Amid Sell-Off In Tech Stocks

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Bitcoin Value Halves From Record High Of $69,000 Amid Sell-Off In Tech Stocks

On Monday, the dollar was steady ahead of the U.S. Federal Reserve’s January policy meeting later in the week. Bitcoin, however, lay battered at a

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On Monday, the dollar was steady ahead of the U.S. Federal Reserve’s January policy meeting later in the week. Bitcoin, however, lay battered at a six month low hit over the weekend due to a sell-off among technology stocks.

“The Fed has taken the markets by the tail,” said Frederic Neumann, HSBC’s co-head of Asian economics research. In a morning note, Frederic Neumann (HSBC’s cohead of Asian economics research), stated that the Fed will once again tug and yank markets this week.

The main driver of currency markets today is the ability to predict when central banks will raise interest rate and end stimulus programs that were launched after Covid-19.

Neumann stated that investors will be compelled to look for guidance from Powell at his press conference on quantitative tightening later this year in 2022. He also said that he wasn’t expecting any policy changes.

On Tuesday, the Fed’s rate-setting Federal Open Market Committee begins its two-day meeting. Some analysts are beginning to speculate that it may raise interest rates for only the second time since the pandemic.

“We believe the greater risk is that the FOMC’s statement depicts an urgency to take action soon, likely in March in the face very high inflation. In a note, analysts from Commonwealth Bank of Australia said that the urgency could lead to a decision to stop quantitative easing abruptly by mid-February.

They added that a bullish statement, and/or a quicker end to QE could encourage markets to price the risk of a 50bp rate increase in March.

On Monday morning, the dollar index, which measures greenbacks against six major peers, was stable at 95.682.

This week’s traders’ agenda includes the Bank of Canada’s January Meeting, wrapping up right before the Fed. A rate hike is possible. Tuesday’s Australian inflation data is due Tuesday. These data will be used by the Reserve Bank of Australia to determine its stance at its next meeting.

The Australian dollar was trading at $0.7180 on Monday morning, which is the lowest point in its recent range. As traders drained riskier assets such as equities and cryptocurrencies, the risk-friendly currency fell late last week.

Bitcoin was trading at $36,026, down 10% on Friday, and falling as low as $34,000 Saturday. This is its lowest level since July 2021.

The world’s most valuable cryptocurrency has almost halved its value since November, when it reached a record high of $69,000.

Most digital assets were affected by the sell-off. Similarly, ether, second-largest cryptocurrency in the world, was at $2516, having also fallen to $2,300 on Saturday.

According to traders, institutional investors are increasing their exposures to cryptocurrency and their movements are more closely related with other risk assets.

Last week, the Nasdaq Composite lost 7.5%. This is its worst week since March 2020.

In traditional currency markets, sterling was close to a two week low at $1.3551 and the euro at $1.1333.

The yen was at its strongest end of the recent range with one dollar at 113.7yen, not far from the 113.47 reached 10 days before. A drop below this level would mark a five-week low in the dollar.