Bitcoin Prices Are Falling. Cryptos Could Be in for a Bumpy Week.

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Crypto prices could be in for a volatile few days.

Ozan Kose/AFP via Getty Images

Bitcoin and other cryptocurrencies were lower Monday as investors headed into a week dominated by economic news and corporate earnings that have the potential to introduce new volatility to digital assets.

The price of Bitcoin has fallen 3% over the past 24 hours to $22,000. The largest digital asset has slipped back from a recent high of $24,200—reached in a rally that buoyed crypto last week—but remains around the highest levels since a dramatic selloff in mid-June and well above the June bottom below $18,000.

Cryptos have climbed back from the depths of a market rout over the past month, but remain vulnerable. Bitcoin recently capped its worst quarter in more than 10 years and is trading at around one-third of its value from all-time highs in November 2021. The market capitalization of the whole crypto space has deteriorated to $1 trillion from $3 trillion in less than nine months.

While the selloff in digital assets was exacerbated by issues in crypto itself—including contagion from the meltdown of stablecoin Terra and failure of once high-flying hedge fund Three Arrows Capital—a correlation to stocks hasn’t helped. Bitcoin and its peers should, in theory, trade independently of mainstream markets, but have shown themselves to be largely correlated to stocks, and especially tech stocks; as such, cryptos have followed the S&P 500 and Nasdaq into a bear market this year.

While Bitcoin seems to be building a base around these latest levels, it might not last long, Jeffrey Halley, an analyst at broker Oanda, wrote in a note. “However this week plays out, I suspect today will be the most sedate day of the week to come,” he said.

Dominating the market this week will be the Federal Reserve’s closely watched decision on interest rates Wednesday. 

Facing the highest inflation in decades, the Fed already has moved aggressively to tame red-hot prices with tighter monetary policy and is expected to raise rates by another super-sized 75 basis points this week. Investors have been fretting over higher rates, which risk denting economic demand to the point of causing recession.

Second-quarter U.S. gross domestic product data will be released Thursday. The data will be scrutinized to see if the U.S. is in a technical recession. Core personal consumption expenditure data, which is the Fed’s preferred inflation measure, also will be released this week.

Also this week is a major wave of corporate earnings—including from Big Tech. Microsoft (MSFT) and Alphabet (GOOGL) report earnings on Tuesday, with Meta Platforms (META) following Wednesday before Apple (AAPL) and (AMZN) on Thursday. 

Shares in some of the largest public companies, like Apple , have the ability to drag stock indexes around depending on how investors react to earnings, and the largest tech giants are all due to report this week. That is key for cryptos in particular because of their close correlation with tech stocks.

Ether, the second-largest crypto, dropped 4% to below $1,550. Smaller tokens, or altcoins, were even weaker, with Solana shedding 5% and Cardano dropping 6%. Memecoins also fell, with Dogecoin and Shiba Inu 5% and 4% lower, respectively.

Write to Jack Denton at