First Mover Asia: Bitcoin Minnows Are Resilient as Long-Term Whales Capitulate to Pressure

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Good morning. Here’s what’s happening:

Prices: Most cryptos decline as investors await the U.S. central bank's likely decision to increase interest rates a half-point.

Insights: Minnows show their commitment to bitcoin.

Technician's take: BTC is at risk of a breakdown as price momentum slows.

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Bitcoin and other cryptos continue their spiral of the past five days as investors await the worst-kept secret in recent U.S. monetary policy, a half-point rate interest rate hike by the Federal Reserve.

The largest cryptocurrency by market capitalization was recently trading at approximately $37,800, down over 2% over the past 24 hours. Ether, the second-largest crypto by market cap, was changing hands at about $2,800, off similarly for the same period. Most other major cryptos were in the red, albeit not by much. SOL, ADA and AVAX had all recently fallen more than a percentage point. CRO and TRX each rose roughly 5% and ALGO jumped nearly 6% a day after announcing that it would become the official blockchain platform of FIFA, soccer's world governing body.

"The macro issues, whether it's the Ukraine war, global supply chain issues and inflation that's affecting every other country as far as leading the Fed to tighten its policies, and in times like these risky assets generally don't perform well," Kapril Rathi, co-founder and CEO of digital asset trading platform CrossTower, told CoinDesk TV's "First Mover" program. "One can argue crypto is pretty much in the same category as tech in terms of risk. We see macro pressure on tech and cryptos at the same time."

The Federal Reserve has been widely expected to begin a more hawkish approach to taming inflation, which has hit 40-year highs and threatens to increase further amid Russia's continued aggression in neighboring Ukraine. The conflict has sent energy prices skyrocketing as many countries look to alternatives from Russian energy, and supply chains have suffered ongoing delays. The price of Brent crude oil, a widely watched measure of energy markets, dropped slightly from Monday but was still trading at about $105 per barrel, up about 40% since the start of the year.

In a report, Arcane Research noted that futures premiums remained historically low, "signaling persistent pessimism from active market participants," and that the Fear and Greed Index was registering “Fear” or “Extreme Fear,” for a fourth consecutive week, its longest period of fearful market sentiment this year.

Rathi struck a cautiously optimistic tone about bitcoin's pricing later in the year. "In the next six to nine months, we will see an important role that bitcoin will play as countries deal with inflation so I am expecting a bounce back in the market."

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