Bitcoin fell for a fifth day in the past six in a continued retreat toward a key technical level as investors mulled mixed signals from Federal Reserve officials around the potential pace of interest-rate hikes.
The largest cryptocurrency dropped as much as 3% to $22,716.59, the lowest level since Aug. 10 and close to its 200-week moving average near $23,000, which Genesis Trading pointed to as a measure historically in focus for the market.
Number two Ether dropped as much as 3.8%. The likes of Polygon, Solana and Avalanche declined 7% or more.
“The rally that brought it back to $25,000 has lost considerable momentum and that could begin to weigh more heavily on the price” of Bitcoin, said Craig Erlam, senior market analyst at Oanda, in a note Thursday. “A move below $22,500 may suggest the rally has run its course for now.”
Cryptocurrencies have been battered this year as the Fed hiked rates amid elevated inflation readings, and risk assets more broadly, like big technology stocks, have struggled.
Bitcoin and Ether are both down about 50% since Dec. 31. Still, they’re off their worst levels in mid-June amid tentative optimism that inflation may be peaking, and as the Ethereum network prepares for its much-anticipated Merge upgrade.
“In the short term, correlation risks are heightened as equities, especially technology names, are delicately poised at key resistance levels,” Jamie Douglas Coutts, senior market structure analyst at Bloomberg Intelligence, wrote in a note Thursday.
In addition, crypto veterans may be cooling off in their buying.
“After a steady climb in the first half of 2022, the amount of Bitcoin that has not moved in over a year has levelled off, signalling a pause in the accumulation behaviour of longer-term investors,” Genesis’s Ainsley To, Marc Chan and Noelle Acheson wrote on Thursday.