Bitcoin Falls Below $50,000 After Wall Street Stocks Sell Off
06 Dec 2021 · 3rd Party Analysis
- Bitcoin price drops over the weekend, trades under $50,000 as major tokens slip 10% or more
- Stock on Wall Street sell-off on Friday, futures modestly higher early Monday morning
What’s Trading in the Markets?
The past week’s trading saw increased selling pressure on Friday among asset classes across the board. First, the European stock market turned lower during its regular session. At the same time, US futures were pointing to a lower open. Right after the bell in New York, stocks declined out of the gate.
What followed was a broad-based selloff in equities from every sector. Tech stocks, in particular, were among the biggest losers of the day. Tesla, for example, slipped 6.4%, while Meta Platforms (formerly Facebook), Apple, and Amazon were lower by 1% or more.
Selling momentum accelerated towards the end of the session. As a result, stock averages in the US logged losses for the day and the week. More precisely, the Dow Jones slipped 0.2% on Friday, and 0.9% for the week. In addition, the S&P500 and the Nasdaq Composite fell by 0.8% and 1.9% respectively on Friday.
What’s the News in Cryptocurrency?
Cryptocurrencies followed the selling wave a day later. On Saturday, investors in the digital asset market retreated their risky bets from bitcoin and other major tokens. Bitcoin, the world’s biggest cryptocurrency, fell by as much as 20% to reach levels near $42,000 per coin.
Also, Ether, the second-biggest coin by market value, tumbled more than 7% on Saturday to slip below $3,900 apiece. The fall in prices of digital assets wiped out billions of dollars from the valuation of the entire market.
Still, cryptocurrencies tend to be more volatile compared to traditional assets like stocks. To this end, crypto traders are used to seeing periods with heavy swings in either direction as prices fluctuate.
What are Traders and Investors Following?
Early on Monday, financial markets prepare to kickstart another week of trading. With this in mind, traders and investors will be following updates over Covid-19 around the world. The Omicron variant is currently weighing over the market sentiment as its effects are still not entirely clear.
Also, the prospects for higher interest rates and earlier tapering from the Federal Reserve is prompting investors to be more defensive. In other words, the US central bank is preparing to withdraw the $120 billion in monthly purchases sooner than planned.
Previously, Fed Chair Jerome Powell wanted to unwind the stimulus by mid-2022. Now, however, as inflation looms, he said he could push for an earlier reduction, sometime in early 2022. This said, Fed officials gather for their regular meeting on Dec. 14-15.
In that context, traders will be looking for opportunities to enter markets across stocks, currencies, and cryptocurrencies.
On this note, US stock futures moved slightly higher in pre-market trading today. On the other hand, the price of bitcoin attempts to rebound from its weekend lows. The orange coin is presently floating near $50,000 per token.
Economic News Today (EST time)
On Monday, Australia will publish its interest rate decision at 10:30 pm. The event could increase the volatility in the Australian dollar, creating trading opportunities in the forex market.