Bitcoin drops to the lowest level in over three months
The majority of stock markets are trading lower in anticipation of upcoming monetary and fiscal policy changes from central banks across the world and as the pandemic situation continues to worsen in china, an event which has led to an escalation in lockdowns in several key areas throughout the country including the financial hub of Shanghai. As a result, we are seeing a negative reaction across several asset classes including crypto currencies, which themselves have been struggling as of late. Bitcoin continued its downward move and after dropping over 15% is now trading at the lowest level since mid January as it hovers in the $33,600 area. As is usually the case, we can notice this sentiment extending to the majority of other cryptos with Ethereum down 4% today and other major altcoins facing difficulty as well. It will be essential for the main cryptocurrency to rebound from this key level, which acted as a reaction area in the past, as a continuation of the downward move could cause a domino effect across the sector. However, as we have been noticing a closer correlation with traditional assets like tech stocks, which themselves have been in a tough situation, it could require a recovery of the general sentiment before we see an improvement in the performance of a particularly volatile asset like Bitcoin.
Author
XTB Analysis Team
XTB Poland
