After yesterday, noting the cryptocurrency market’s surprising resilience in the face of recent rumours of an interest rate rise by the US Federal Reserve, it appears we may have spoken too soon.
Bitcoin fell below $43,000 in the early hours of this morning, testing lows not seen since the start of December. The world’s largest cryptocurrency dropped to $42,503.88 around 5.30pm EST, according to CoinDesk data.
Bitcoin prices since bounced back somewhat, rising to more than $43,750, but have again fallen below $43k – down around nine per cent since yesterday. Other cryptocurrencies are down similar amounts too. Ethereum is down more than 10 per cent to just below $3,400 at time of writing.
The drop echoes falls across the wider stock markets, after America’s central bank yesterday revealed it could raise interest rates sooner than expected, to tame US inflation. The news saw the Nasdaq plunge more than three per cent overnight in its biggest one-day percentage drop since February. In London, the FTSE 100 has fallen by nearly one per cent.
The minutes of the Federal Reserve’s December meeting, released last night, shows that Fed officials were concerned about America’s “elevated levels of inflation”, and considering normalising monetary policy faster to combat rising prices. US inflation hit 6.8 per cent in December – the highest level since 1982. The Fed minutes say: ‘Participants generally noted that, given their individual outlooks for the economy, the labour market, and inflation, it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated’.
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Yesterday’s Crypto AM Daily in association with Luno
In the markets
The Bitcoin economy
*Definitions and insights can be found at https://bytetree.com/insights/
Total crypto market cap
The total capitalisation of the entire cryptocurrency market at time of writing is currently $2,057,140,501,475, down from $2,229,527,771,967 yesterday.
What Bitcoin did yesterday
We closed yesterday, January 5 2022, at a price of $43,569.00, down from $45,897.58 the day before. The daily high yesterday was $46,929.05 and the daily low was $42,798.22.
This time last year, the price of Bitcoin closed the day at $39,371.04. In 2020, it closed at $7,769.22.
Bitcoin market capitalisation
Bitcoin’s market capitalisation at time of writing is $813.96 billion. To put it into context, the market cap of gold is $11.441 trillion and Tesla is $1.092 trillion.
The total spot trading volume reported by all exchanges over the last 24 hours was $42,155,048,040, down from $45,288,793,447 yesterday. High volumes can indicate that a significant price movement has stronger support and is more likely to be sustained.
The price volatility of Bitcoin over the last 30 days is 41.65%.
Fear and Greed Index
Market sentiment today is 15, in Extreme Fear.
Bitcoin’s market dominance
Bitcoin’s market dominance today is 30.95. Its lowest ever recorded dominance was 37.09 on January 8 2018.
Relative Strength Index (RSI)
The daily RSI is currently 39.14. Values of 70 or above indicate that an asset is becoming overbought and may be primed for a trend reversal or experience a correction in price – an RSI reading of 30 or below indicates an oversold or undervalued condition.
Convince your Nan: Soundbite of the day
Goldman Sachs in 2020: Bitcoin is not an asset class.
Goldman Sachs in 2022: Bitcoin will take market share from gold.
What they said yesterday
Do you own it?
Crypto AM: Editor’s picks
Bitcoin hashrate touches new all time high
Peter McCormack: Transforming Bedford FC into a global Bitcoin brand
Exclusive: FTSE plots development of digital asset index in crypto push
Crypto could give London a unique post-Brexit advantage, says Hammond
Diamond claws: Crypto trading hamster dies after standout investing career
New cryptocurrency named ‘JRR Token’ blocked by lawyers for Lord of the Rings creator Tolkien
El Salvador to build Bitcoin city at base of volcano
Crypto AM: Features
Crypto AM: Spotlighthttps://www.cityam.com/bumper-set-to-fire-up-its-liquidity-provision-program-today/embed/
Crypto AM: Founders Series https://www.cityam.com/using-blockchain-to-overcome-the-challenge-of-universal-connectivity/embed/
Crypto AM: Industry Voices https://www.cityam.com/the-unforeseen-reputational-risks-of-nfts-and-how-to-avoid-them/embed/
Crypto AM: Contributors
Crypto AM: In Conversation with James Bowaterhttps://www.cityam.com/creating-a-future-of-access-to-financial-tools-for-everyone-with-meld/embed/
Crypto AM: Tomorrow’s Money with Gavin S Brownhttps://www.cityam.com/will-tesla-change-direction-on-bitcoin-again/embed/
Crypto AM: Mixing in the Metaverse with Dr Chris Kacherhttps://www.cityam.com/the-metaverse-is-here-and-even-facebook-is-getting-on-board/embed/
Crypto AM: Visions of the Future, Past & Present with Alex Lightman https://www.cityam.com/e-naira-digitising-nigeria-improving-lives-and-advancing-national-infrastructure/embed/
Crypto AM: Tiptoe through the Crypto with Monty Munford https://www.cityam.com/ive-spotted-curious-similarities-between-bitcoin-and-the-taliban/embed/
Crypto AM: Taking a Byte out of Digital Assets with Jonny Fry
Crypto AM: Parliamentary Special
Part one of two – April 2021https://www.cityam.com/the-government-is-cautious-about-crypto-but-i-think-well-get-there/embed/
Part two of two – April 2021https://www.cityam.com/opening-our-eyes-to-financial-inclusion-for-the-good-of-the-economy/embed/
Five-part series – March 2021
It’s definitely tempting to get swept up in the excitement, but please heed these words of caution: Do your own research, only invest what you can afford, and make good decisions. The indicators contained in this article will hopefully help in this. Remember though, the content of this article is for information purposes only and is not investment advice or any form of recommendation or invitation. City AM, Crypto AM and Luno always advise you to obtain your own independent financial advice before investing or trading in cryptocurrency.
All information is correct as of 08:00 BST