Key Takeaways
- Bitcoin experiences a sell-off, entering a correction phase with over 10% decrease from its recent all-time high.
- Profit-taking and anticipation of the Federal Reserve meeting contribute to the pullback in bitcoin prices.
- Lower interest rates could lead to weakened U.S. Treasury yields, making cryptocurrencies more appealing to investors.
- Bitcoin’s decline influences other crypto-tokens and related stocks like MicroStrategy.
Bitcoin Correction and Federal Reserve Meeting
Bitcoin is currently in a correction phase, trading more than 10% lower than its recent peak of $73,000. This downward trend has impacted other cryptocurrencies such as Ether (ETH), Solana (SOL), and Cardano (ADA).
Impact of Federal Reserve Meeting
Crypto investors are closely monitoring the Federal Reserve’s upcoming interest rate decision for potential insights into market movements. Lower interest rates could decrease U.S. Treasury yields, making cryptocurrencies more attractive. However, prolonged higher rates may pose challenges for riskier assets.
ETFs and Bitcoin Rally
The recent surge in bitcoin prices was attributed to the demand generated by spot bitcoin ETFs introduced earlier this year. Despite significant outflows from Grayscale’s Bitcoin ETF Trust (GBTC), the selling pressure affecting bitcoin is not directly linked to ETF activities.
Crypto-Related Stocks Performance
MicroStrategy witnessed a notable stock decline, followed by a partial recovery, after revealing details of its recent bitcoin purchases. The company acquired a substantial amount of bitcoins, impacting its stock performance. The upcoming bitcoin halving event in April may further affect bitcoin miners and related stocks like Marathon Digital (MARA), Riot Blockchain (RIOT), and Cleanspark (CLSK).