Crypto altcoins lead declines; Bitcoin drops back below $19,000 Crypto altcoins lead declines; Bitcoin drops back below $19,000
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Crypto altcoins lead declines; Bitcoin drops back below $19,000

Crypto altcoins lead declines; Bitcoin drops back below $19,000

Bitcoin, the largest cryptocurrency by market value, fell as much as 3 per cent on Thursday in New York to $18,585

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Crypto altcoins lead declines

Prices in the cryptoasset market slumped across the board on Thursday, with so-called altcoins being hit particularly hard as risk aversion continues to weigh on global financial markets.

Bitcoin, the largest cryptocurrency by market value, fell as much as 3 per cent on Thursday in New York to $18,585, its lowest point since September. 27. Ether fell more than 4 per cent, with both coins trending toward the lower end of their respective ranges.

“From what we can tell, Bitcoin has been trading across a trendline between the 2018 and 2022 low for the last month. It’s just dipped below it, but has generally recovered fairly quickly,” said Fadi Aboualfa, head of research at crypto custodian Copper. “Based on some of our own projections, we see Bitcoin trading closer to $21k by the end of the month should macro-events not weigh-in negatively.”

Elsewhere, US futures were trading positively and options activity showed a rise in hedging ahead of a US September inflation report. Minutes from the Federal Reserve’s September meeting on Wednesday showed officials were committed to raising interest rates to curb inflation, a touchstone for crypto activity where Bitcoin has moved largely in tandem with risk assets.

“At a time when we’re heading from interest rate and inflation anxiety, into a probable recession, it’s possible that while reducing risk exposure, investors will be more willing to hold traditional risk assets that cryptos which were becoming increasingly popular as an alternative in the zero interest rate environment,” said Craig Erlam, senior market analyst at Oanda Europe Ltd.

Meanwhile altcoins including Solana, Avalanche, Polygon and Cardano all tumbled more than 6 per cent in the last 24 hours. As interest rates have risen this year, traditional markets like US Treasuries and corporate bonds have outpaced yields among decentralised finance protocols where returns are diminishing.

Volatility has also been absent from crypto in recent months, with fiat currencies taking its place as the new hotspot for traders seeking to profit off price differences across exchanges. The T3 Bitcoin Volatility Index is down 6.7 per cent since the start of September, while the JPMorgan Global FX Volatility Index is up 13.4 per cent.

“Altcoins have been trading above their trendlines,” Aboualfa said. “It could be markets are giving things their last test to see if things can hold, but they can certainly fall much lower with ETH testing just under $1k, and Solana around $27.”

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