K33 Research analysts stated in a report that despite the decline in global stock indices, Bitcoin remains above $95,000. However, on a weekly basis, Bitcoin has fallen in tandem with major stock indices. K33 Research head Vetle Lunde said, "In the two weeks following the FOMC meeting, global risk has decreased, and Bitcoin's two-week return rate is negative 11%, while Ethereum has dropped 15%, pushing the ETH/BTC exchange rate down to 0.036."
Vetle stated that the current decline in Bitcoin is closely related to the global stock market. Since the end of September, the correlation of this digital asset with the Nasdaq has broken 0.50 for the first time in 30 days. He believes that the FOMC meeting on December 18 is a key factor leading to the market downturn. At this meeting, the Fed's dot plot was revised to forecast two rate cuts in 2025, down from four predicted in September. Rate cuts often boost the market, so the reduction in expected rate cuts is seen as unfavorable for risk assets like Bitcoin.
Vetle stated, "Although the Fed has cut rates by 100 basis points since September, the 10-year U.S. Treasury yield has risen by 100 basis points, indicating that the market expects inflationary pressures in the future." He pointed out that after the FOMC meeting, Bitcoin experienced significant ETF fund outflows, and MicroStrategy's purchases have also become more restrained. (The Block) #crypto2023