Bitcoin (BTC) Sinks Below $19,000, Major Swings Expected

Bitcoin (BTC) prices dipped below $19,000 again as soon as the U.S. equity markets opened on Tuesday. The S&P 500 is 1.25%, and the correlation between Bitcoin and the index is quite evident. There is severe selling pressure on the number one crypto asset in the world.

With a market in a tailspin,Bitcoin (BTC), when reports last came in, was changing hands at $18,946, down1.2%with a market cap of $362 billion. As mentioned earlier, the relationship between the S&P 500 and the 60-day correlation coefficient is at 0.72, a little below the May high. A coefficient figure of 1 indicates that assets are moving in lockstep, and a negative reading indicates they are moving in the opposite direction.

Courtesy: Bloomberg

Speaking to Bloomberg about Bitcoin, John Porter, CIO and head of equities at Newton Investment Management, said: “Right now, it is very much a proxy for beta in the market. Crypto’s going through growing pains right now. We just don’t know what it’s going to be when it grows up if you will.”

Bitcoin (BTC) Riff Raff Expected

All eyes are on the U.S. Federal Reserve, which will announce a rate hike on Wednesday, September 21. The act is a foregone conclusion, and investors are bracing for another bout of volatility. The FED is determined to bring down inflation at all costs and will pull liquidity out of the market with interest rate hikes.

However, this has not dampened the spirits of MicroStrategy – the most significant corporate Bitcoin (BTC) holder continues to make new purchases.

Tagus Capital’s Ilan Solot said: “Markets — both crypto and broader — are in full macro risk mode ahead of the FOMC this week. I don’t think MicroStrategy’s purchase moves the needle much. A chunk of the leverage longs, especially in ETH, has been cleared out. So that is a better technical position, but we still need a positive catalyst to make a difference in sentiment.”