It's been a wild and whacky 24 hours for Bitcoin (BTC 0.06%), and many other top cryptocurrencies as well, for that matter.
CRYPTO: BTC
Key Data Points
As of 24 hours ago, Bitcoin was trading around $92,450 per token, sinking to an intraday low of around $89,420 at 11:15 a.m. ET, before rallying to a 24-hour high of almost exactly $93,000 per token as of 4:30 p.m. ET. That's good for a trough-to-peak move of 4.3% today.
This significant intraday volatility has also been observed in other markets, with the Nasdaq (which tracks mostly technology and high-growth stocks) experiencing similar intraday moves. Thus, the entire thesis regarding the correlation between Bitcoin and other risk assets increasing appears to be at play again today.
With that in mind, let's dive into a few token-specific catalysts that are driving Bitcoin's rebound today.
Investors looking at the bright side of recent macro developments
Source: Getty Images.
This week's key catalyst for most risk assets was the Federal Reserve's interest rate decision yesterday, in which the FOMC decided to cut interest rates by another 25 basis points (0.25%) to offset continued weakening in the jobs market. Concerns around inflation remain, and those concerns could benefit assets viewed as inflation hedges (such as Bitcoin). However, for now, lower interest rates should provide a boost to those looking to value more speculative risk assets, and Bitcoin is about as prime an example of such an asset in the market as one can find.
An improving outlook for risk assets has certainly bolstered risk-on bets this afternoon, with buying activity picking up sharply for Bitcoin and other high-growth equities. Liquidation data for the past day, which reflects the number of leveraged derivatives bets unwound over a given period, has been mixed. A nearly equal amount of long and short liquidations have taken place at the time of writing, suggesting Bitcoin traders are looking for clear direction on where this token may be headed from here.
This afternoon's bullish price action for Bitcoin appears to be mostly sentiment-driven, offsetting concerns this morning around a key Bitcoin price downgrade from Standard Charter, as well as growing concerns that MSCI and others may ban crypto-heavy firms from indexes.
With several competing headwinds and tailwinds at play right now, I'd expect to see some choppiness moving forward. Perhaps today's price action in Bitcoin is a harbinger of what's to come.
