Cryptocurrency market February 17 CHK: Bitcoin turns below 24,000, altcoins and US stocks are on fire

Bitcoin plummeted towards $23,350 after bouncing off the $25,000 region yesterday.

Cryptocurrency Market

After a strong rally, establishing a local top at $25,250, the highest level since August 2022, Bitcoin quickly turned down towards the $23,350 region as investors seemed concerned about persistent inflation. Fed’s monetary policy and crypto industry “crashes”. The largest cryptocurrency in the market is currently trading around $23,700, down 4.8% over the past 24 hours.

Optimism in the market seemed to fade over the span of a few hours as January’s producer price index (PPI) spiked 0.7 percent month-on-month, suggesting that the US central bank is still has not been successful in controlling inflation for more than 1 year.

In a tweet on February 16, market analyst, Mohit Sorout, announced that the Dollar Cost Average (DCA) indicator is currently “showing a bull market is forming.”

The latest Bitcoin metrics are bullish on the long-term timeframe, DCA is even attracting attention from major Bitcoin investment groups.

Its buy signals are rare, with Sorout seeing only 3 in Bitcoin’s history.

Sorout argues that, once DCA enters profitable territory, marked as 365 on its scale, major bull markets begin. The one exception is in mid-2022, when price moves above 365 then reverses and BTC/USD begins its journey to a bottom at $15,600.

However, amid growing confidence in Bitcoin’s long-term resilience in 2023, others are also willing to believe in the latest breakout.

Ethereum (ETH) also acted similarly to BTC, rallying above $1,700, establishing a local top at $1,742 before a sharp retracement.

The second largest cryptocurrency by market capitalization is currently changing hands around $1,657, down 2% on the day.

Other major altcoin projects in the top 100 also turned down as BTC plunged.

Frax Share (FXS) and Render Token (RNDR) are the two worst performing projects in the short term, losing about 11% of their value. However, on the 7-day timeframe, RNDR is still showing over 25% growth.

Other altcoins such as SingularityNET (AGIX), Oasis Network (ROSE), Mina (MINA), The Graph (GRT), Stacks (STX), Synthetix (SNX), Aptos (APT), ImmutableX (IMX)… also dropped. from 5-9%.

Macro factors

The US stock market fell in trading on Thursday (February 17), as statistics showed that inflation was higher than expected and the number of first-time jobless claims fell, reflecting the soundness of the economy. economy, strengthens the possibility that the Federal Reserve (Fed) will continue to tighten monetary policy. Crude oil prices also fell slightly because of interest rate concerns and oil demand.

At the close, the Dow Jones Industrial Average fell 431.2 points, or 1.26%, to 33,696.85 points. The S&P 500 index slid 1.38% to 4,090.41 points. The Nasdaq index fell 1.78% to 11,855.83 points.

Microsoft and Disney were the two stocks that contributed the most to the Dow Jones decline this session, down 2.66% and 3.12% respectively. Meanwhile, Tesla fell 5.69% as the electric-car company announced a recall, becoming the stock that has put the most pressure on the S&P 500.

A report from the US Labor Department showed that the country’s producer price index (PPI) rose 0.7 per cent in January, far exceeding analysts’ forecast for a 0.4 per cent increase. Another report from the US Department of Labor showed that the number of first-time jobless claims for the week ended February 11 unexpectedly decreased.

The new data comes after financial markets this week received reports that the consumer price index (CPI) and US retail sales in January both beat forecasts. Collectively, this series of data shows that the US economy is still standing strong after 8 rate hikes since March 2022 by the Fed, and shows that the Fed still has a long way to go in the fight against inflation. development – ​​just as the officials of this central bank insist.

“Both inflation reports this week show the persistence of inflation and the fight against inflation is not over. The PPI data released today also shows the highest monthly increase since the beginning of the summer,” said Mike Loewengart, head of model portfolio construction at investment bank Morgan Stanley. CNBC.

Mr. Lowengart added that the unemployment claims statistics are a sign of continued tightening of the labor market. “It is not surprising to see the market weaken as hopes of a soft Fed shift over the next few months are fading. All in all, investors should be aware that inflation may not return to normal levels as soon as many hope, and that will cause a lot of volatility in the near-term,” he said.

The statements of several Fed officials at the same time made Wall Street more nervous. The President of the Federal Reserve Bank of St. Louis, James Bullard, said he wanted a 0.5 percentage point rate increase at its meeting earlier this month – in fact the Fed raised rates by a 0.25 percentage point jump. Mr. Bullard added a 0.5 percentage point increase could be applied at the March meeting.

Cleveland Fed President Loretta Mester also announced her support for raising rates with a larger jump.

With this decline, the Dow Jones is heading for the third consecutive week of decline. The S&P 500 is now flat compared to the beginning of the week, while the Nasdaq is up slightly. Since the beginning of the year, the S&P 500 is now up about 7%, and the driving force for that increase is the hope that de-escalation will cause the Fed to stop raising interest rates or even cut rates this year.

On the energy market, Brent crude oil futures in London fell by $0.24/barrel to $85.14/barrel. WTI oil futures in New York fell 0.1 USD/barrel, to 78.49 USD/barrel.

In addition to worries about rising interest rates, oil prices this session were under pressure from the fact that the USD exchange rate sometimes rallied to a 6-week high.

“Brent oil prices are unlikely to rise above their 100-day moving average this week,” said UBS analyst Giovanni Staunovo, pessimistic.

Brent oil price has fluctuated in the range of 80-90 USD/barrel for the past 6 weeks, while Brent oil price has fluctuated between 72-83 USD/barrel since December. However, besides the downward pressure, oil price still is being supported by hopes of a recovery in oil demand in China. This week, both the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) raised their forecasts for global oil demand in 2023.

Speaking on Thursday, Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, said the 2 million bpd production cut agreement that OPEC+ is working on would be maintained until the end of the year. Mr. Abdulaziz is also cautious about China’s needs.

OPEC+ is an alliance between OPEC and some non-member countries including Russia.