Bitcoin has slipped below the crucial $20,000 mark losing 1.83% of its value in the last 24 hours. Ethereum, despite the historic Merge, lost 9.44% and is trading at $1,416. The top two cryptocurrencies failed to regain lost ground after Wednesday’s US inflation data saw significant price drops in the crypto market.
BTC, at the time of writing this article, was changing hands at $19,715. It continues to trade in tandem with the US stock market. The correlation between digital assets and equities remains extremely high. Bulls are at the $19,800 mark.
If Bitcoin comes in closer, the price action would be submerged within a previous consolidation range. Associated factors suggest that the popular cryptocurrency could experience continuous smart money fakeouts like the current price action, and still be a speculative gamble. Moreover, a significant weakness with tech stocks is weighing on cryptos.
Analysts say Ethereum’s underperformance should not come as a surprise as the upgrade was priced in by the market. Ethereum’s successful transition to a proof-of-stake (PoS) consensus mechanism just ended up as a “sell the news” event. Edward Moya, OANDA senior market analyst, said Ethereum is down significantly. He believes volatility should remain elevated into the weekend. Crypto trader Michael van de Poppe says markets will be down, pricing in the worst, and a 100 basis points rate hike until the next meeting of the US Federal Reserve.