Bitcoin (BTC-USD) and ethereum (ETH-USD) are facing intense selling pressure in midday trading Thursday as stocks erase gains a day after Fed boss Jerome Powell ruled out bigger interest rate hikes.
The global crypto market cap is drifting down by almost 5.6% to $1.66T over the past 24 hours.
Moreover, bitcoin (BTC-USD -8.1%) is cratering to $36.5K as of shortly before 3 p.m. ET and ether (ETH-USD -7.0%) is sliding to $2.73K. Looking at the major U.S. stock market indices, the Dow Jones (DJI) -3.4%, S&P 500 (SP500) -3.7% and Nasdaq (COMP.IND) -5.2%. Bonds are getting slaughtered as well, with the 10-year U.S. Treasury yield (TLT) soaring nearly 15 basis points to 3.06%.
Amid a higher interest rate and strong dollar environment, bitcoin (BTC-USD) has struggled to fully break out of its $40K key level since the end of April and has been rangebound since January. The “technical picture in BTC remains poor, in spite of a less hawkish Powell, BTC failed to regain 40,000, hence this pull back,” Teong Hng, chief executive of crypto investment firm Satori Research, told Bloomberg. “As equity markets in U.S. reversing yesterday’s gains, crypto follows suit,” he added.
Stock market price action has been wild recently. On Fed day, May 4, “this was the greatest upside-day for the S&P 500 on a Fed rate hike day since Nov 1978,” according to a Twitter post by market analyst Michael Goodwell. The last time the Fed hiked the benchmark lending rate was in Dec. 2018, though the stock market reacted poorly.
Interestingly, bitcoin (BTC-USD) has been in a six-month cyclical decline, while the S&P 500 topped in the beginning of this year, implying that BTC may be a good predictor of risk asset flows, or it could be coincidental given the coins’ exceptional price volatility.
Other cryptos in the red include: binance coin (BNB-USD -3.2%), ripple (XRP-USD -3.1%), solana (SOL-USD -2.6%), terra (LUNA-USD -4.7%), cardano (ADA-USD -4.9%), dogecoin (DOGE-USD -2.4%), avalanche (AVAX-USD -5.1%), polkadot (DOT-USD -5.1%), shiba inu (SHIB-USD -2.9%) and wrapped bitcoin (WBTC-USD -5.5%).
Crypto-focused stocks: Riot Blockchain (RIOT -11.9%), Marathon Digital (MARA -11.3%), SOS (SOS -10.6%), HIVE Blockchain (HIVE -8.1%), BIT Mining (BTCM -9.2%), CleanSpark (CLSK -11.9%), MicroStrategy (MSTR -12.7%), Silvergate Capital (SI -13.6%) and Coinabse Global (COIN -11.6%).
Earlier this week, (May 4) bitcoin outpaced stocks ahead of Fed decision day.