Cryptocurrency markets experienced a significant decline during Wednesday's trading session, with Bitcoin, the world's largest and most well-known digital currency, breaking through a psychological support level and dropping to $66,354. This 3.3% drop comes at a time when traditional financial markets are showing a different trend, raising questions about the current decoupling between digital assets and stock markets.
Performance diverges between crypto and Wall Street
In a scene reflecting a divergence in investor risk appetite, digital assets declined while US stocks saw a significant rise. The stock market rally was fueled by a stronger-than-expected US jobs report, bolstering confidence in the strength of the American economy. While cryptocurrencies and tech stocks typically move in tandem, this correlation has been disrupted, with the crypto decline suggesting that investor confidence in digital assets has not yet fully recovered from the corrections experienced earlier this year.
Ethereum joins Bitcoin in the decline
Bitcoin wasn't the only casualty of this decline; Ethereum, the second-largest cryptocurrency by market capitalization, also fell. Ethereum dropped 3.8%, reaching a session low of $1,931 per unit. This widespread sell-off among leading cryptocurrencies reflects broad selling pressure gripping the market, driven by profit-taking and caution regarding future volatility.
Expert analysis: Decline for the third day
Commenting on these movements, Bloomberg quoted Alex Kubits-Kevich, senior market analyst at FxPro, as saying in a research note: “Bitcoin’s price fell below $67,000, marking its third consecutive daily decline.” The analyst explained that the cryptocurrency, which had surged 20% from its lows last Friday, has since lost nearly half of those gains during this week’s trading, indicating the continued uncertainty and volatility among traders.
The economic context and its impact
This price movement is a significant indicator for economic observers, as it reveals the cryptocurrency market's sensitivity to macroeconomic data in a way that differs from traditional markets at present. While equity investors might view strong jobs data as a positive sign of growth, crypto investors may interpret it more cautiously, fearing a continuation of tight monetary policies, which could lead them to temporarily reduce their exposure to high-risk assets.
