• Bitcoin fell below $23,000 on Jan. 31, following a recent move to a five-month high over the weekend.
• Ethereum also moved lower today.
• The conference board will release its consumer confidence report later today, with the Federal Reserve holding its policy meeting on Wednesday.
Cryptocurrency markets experienced a significant drop on Tuesday, with Bitcoin and Ethereum both falling below key levels in the day’s trading session.
The price of Bitcoin, the world’s largest cryptocurrency, had surged over the weekend to a five-month high of $23,296.53 before retreating sharply on Tuesday to below $23,000. It hit a low of $22,657.58 during the day and is currently trading around the $22,800 mark. The decline appears to have been triggered by traders taking profits from the recent surge, as well as anticipation of the upcoming Federal Reserve policy decision.
Ethereum, the world’s second largest cryptocurrency, also experienced a decline. The price dropped from a high of $1,595.86 to an intraday bottom of $1,546.66, representing a decline of nearly 4%. It has since recovered slightly and is currently trading around the $1,560 mark.
The decline in the prices of Bitcoin and Ethereum follows a period of relative calm that had seen both coins consolidate after hitting four-month highs earlier in January. Investors will now be looking ahead to the release of the Conference Board’s consumer confidence report later today and the Federal Reserve’s policy meeting on Wednesday for clues on the state of the US economy.
The cryptocurrency market has been buoyed in recent months by the increasing acceptance of digital assets by mainstream institutions and investors, as well as the prospect of greater regulation. However, the volatility of the market means that any significant economic news could have a significant effect on prices. As such, investors will be watching closely to see how the market responds to these upcoming events.