Bitcoin continues to trade in a tight range of $18,000 to $25,000 mark, keeping investors on edge about where the price is going next. The crytpo market has been plagued with a number of issues from collapsed projects to bankruptcies.<\/p>\n
Nurphoto | Getty Images<\/p>\n
Bitcoin briefly topped $20,000 on Tuesday, hitting its highest level in the more than a week, but is still struggling to break out of its tight trading range.<\/p>\n
The world's largest cryptocurrency by market cap turned lower, however, as stocks fell deeper into a bear market. It was last lower by less than 1% at $19,078.21, according to data from Coin Metrics. Ether was also down by less than 1%.<\/p>\n
Bitcoin continues to struggle for direction. It has been trading between $18,000 and $25,000 since mid-June after a crash saw nearly $2 trillion wiped off the entire crypto market since its peak in November.<\/p>\n
That market decline was driven by interest rate increases from central banks aimed a controlling rampant inflation as well as a wave of bankruptcies and insolvency issues that filtered through the crypto industry.<\/p>\n
Crypto investors have been watching monetary policy because digital currencies have been closely correlated to U.S. stock markets this year. Higher interest rates have put pressure on the S&P 500 and tech-heavy Nasdaq, which has filtered through other risky assets including cryptocurrencies.<\/p>\n
The U.S. Federal Reserve's 0.75 percentage point rate hike last week marked a \"major event\" for crypto markets, according to Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno.<\/p>\n
\"This was broadly in line with market expectations and hence, we've seen a lot of that sentiment priced in,\" Ayyar said.<\/p>\n
Interestingly, bitcoin's rally, which began on Monday, happened despite a fall in U.S. stocks with the S&P 500 closing at its lowest level of 2022. Stock futures rose on Tuesday. So, there are signs that perhaps the correlation between crypto and stocks could be weakening.<\/p>\n
Meanwhile, investors are watching the U.S. dollar closely. The dollar index, which tracks the greenback against a basket of currencies, is up more than 18% this year. Bitcoin moves inversely to the dollar, so a strong greenback is negative for bitcoin. However, Ayyar said that the dollar index could be nearing its top which would mark a potential bottom for bitcoin. That could be a reason behind bitcoin's surge.<\/p>\n
\"Traders hence might also be positioning themselves accordingly,\" Ayyar said.<\/p>\n
<\/p>\n