Bitcoin Expects First 2-Day Drop In 2023 As Microsoft Lowers Sentiment

Bitcoin is in a flirtation after its first consecutive fall since the start of the year, after the companyMicrosoft published a poor earnings outlook, which worsened investor sentiment in general.

The largest token fell by 2.5% and as of 9:26 am in Singapore on Wednesday traded at a price of about $22,380 after lowering in the US. A number of smaller coins, from Ether to Cardano and Avalanche, were also in the red. Digital assets are one of many investments that jumped in early 2023 on bets that central banks will slow down or even cancel interest rate hikes in the coming months.

However, an optimistic position is vulnerable toreversals, for example, if the Federal Reserve at its meeting next week abandons the “dovish” expectations in the ongoing fight against inflation. According to Tony Sycamore, market analyst at IG Australia, the disappointment in Microsoft's forecasts was reflected in cryptocurrencies, which remain fairly highly correlated with technology stocks.

“With risky assets this year there werealmost the same as trying to hold a ball underwater”, – he said. “The market is now considering how much further to push them”. The surge in short covering that likely contributed to Bitcoin's 36% jump this month could also fizzle out, said Hayden Hughes, chief executive of social trading platform Alpha Impact. “Prices began to reverse as hedge funds took short positions again after the weekend”, – he said.

Kathy Stockton, founder of Fairlead Strategies LLC,The technical analysis research firm sees significant resistance for Bitcoin at around $25,000, a level the token last reached in August. In a note this week, Stockton said she was “neutral on the interim outlook as overbought conditions return” for Bitcoin.

Last year, bitcoin and the 100 largest tokensfell in price by more than 60% due to rising borrowing costs and a series of cryptocurrency explosions. According to CoinGecko, the total market value of digital tokens rose by about $250 billion in January. © 2023 Bloomberg