Key facts
- Bitcoin recovered to trade around $62,000 after earlier losses.
- The Nasdaq closed down 1% amid a volatile trading session.
- Gold prices also fell, declining below $4,200 an ounce.
- Ether, Solana, and XRP experienced significant price drops.
- The market is pricing in higher interest rates, impacting non-yielding assets.
- A short squeeze on Monday fueled a brief rally, but sustained buying has been absent.
Bitcoin and other cryptocurrencies experienced a decline alongside tech stocks and gold, as market participants braced for a key US inflation report and a potentially hawkish stance from Federal Reserve Chair Kevin Warsh. Bitcoin traded below $61,300 on Wednesday, marking a 6.9% weekly loss, while gold fell below $4,200 an ounce. Ether, Solana, and XRP also saw significant drops. The broader Asian equity markets, including South Korea's Kospi, tumbled, and Nasdaq 100 futures indicated a lower open on Wall Street. Brent crude remained near $92 a barrel, and Treasury yields rose. The recent bounce in Bitcoin was largely attributed to a short squeeze, with over $500 million in bearish bets liquidated, but sustained spot demand has been lacking, hindering the ability of rallies to hold. Analysts are watching whether Bitcoin can maintain support through the inflation data or if it continues to trade in lockstep with the Nasdaq.