Saturday, 28 January 2023

Crypto News

BTC price clings to $20K as US stocks lose the equivalent of 4 Bitcoin market caps

BTC price clings to $20K as US stocks lose the equivalent of 4 Bitcoin market caps

Bitcoin (BTC) briefly lost $20,000 support overnight into Sep. 14 after hot United States inflation sent risk assets crashing lower.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Markets lose big in bid to “fight the Fed”

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it hit lows of $19,870 on Bitstamp — its worst since Sep. 9.

The move came amid a stocks rout triggered by Consumer Price Index (CPI) inflation data for August coming in above expectations.

Despite still being lower than July, the market had hoped for a quicker cooling of inflation more broadly and hence the chance of a quicker loosening of policy by the Federal Reserve.

With that prospect now appearing slim, equities indexes hemorrhaged value, with Apple losing $154 billion — the sixth-biggest daily loss in U.S. stock market history.

“Markets had tried desperately to spin a bull case and fight the Fed, basically, and that’s a dangerous place to be,” Carol Schleif, deputy chief investment officer at BMO Family Office, told Bloomberg.

In total, U.S. stocks fell by approximately $1.6 trillion on the day — more than four times the Bitcoin market cap.

The U.S. dollar consequently increased in strength, with the U.S. dollar index (DXY) surging back towards twenty-year highs.

At the time of writing, the index circled just under 110, less than 0.9% below that macro peak seen earlier in the month.

U.S. dollar index (DXY) 1-hour candle chart. Source: TradingView

“Septembear” comes back to haunt BTC bull

At the time of writing, cross-market crypto liquidations totaled $355 million, with Sep. 13 forming one of the largest long liquidation events in recent weeks.

Related: Bitcoin margin long-to-short ratio at Bitfinex reach the highest level ever

Data from on-chain monitoring resource Coinglass also captured $88 million of short liquidations on that day.

Crypto liquidations chart. Source: Coinglass

The sell-off thus left BTC/USD up just 1% for the month of September, which was nonetheless still the first “green” September since 2016, Coinglass showed.

BTC/USD monthly returns chart (screenshot)….

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