News of officials planning to shrink the Fed’s balance sheet by US$95 billion a month weighed on risk assets globally including Bitcoin which dropped about 5% Thursday early morning Asia time.
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- Bitcoin fell as much as 4.7% on sell off in risk assets following release of the minutes of the US Federal Reserve’s meeting in March.
- BTC is now down 4.4% to US$43,278.07, after some bottom-buying by investors.
- Other cryptocurrencies, including Ethereum, Terra, Binance Coin, Solana, mirrored Bitcoin’s movement, with Dogecoin down almost 12%.
- These occasional downturns and rallies are of little significance for committed Bitcoin investors, Ben Caselin, the head of research and strategy at cryptocurrency exchange AAX, told Forkast.
- “But for day and swing traders and in particular futures traders, the volatility and unpredictability of Bitcoin’s short-term price trajectory makes it a difficult asset to navigate,” he added.
- While risk-assets such as Bitcoin “can be seen to stall” amid a liquidity squeeze, its overall fundamentals remain in good shape with “a shift in sentiment” leading to a quick price recovery, Caselin opined.
- The moves come as Bitcoin 2022, the largest annual gathering of crypto enthusiasts, is underway in Miami, with its Mayor Francis Suarez calling for a “pro-Bitcoin” president to take office.
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