Stock - Bitcoin and Dollar
If Bitcoin investors were hoping for more time north of $25k, they will be disappointed with the latest turn of events. Image Credit: Reuters

New York: 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 per cent to $22,716.59, the lowest level since August 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 per cent. The likes of Polygon, Solana and Avalanche declined 7 per cent 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. “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 per cent since December 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.

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 leveled off, signaling a pause in the accumulation behavior of longer-term investors,” Genesis’s Ainsley To, Marc Chan and Noelle Acheson wrote.