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Markets: Bitcoin, Ether fall with bearish U.S. equities, but Bitcoin long bets jump

Bitcoin and Ether dipped in Tuesday morning trading in Asia along with all other top 10 non-stablecoin cryptocurrencies, as Wall Street fell overnight on concern the Fed may crank up interest rates for longer than expected. Solana led the losers. Despite the dip in Bitcoin, asset managers are holding large long positions in the world’s biggest cryptocurrency as of Jan. 24, according to the latest report by the U.S. Commodity Futures Trading Commission (CTFC).

See related article: Filecoin developer Protocol Labs cuts 21% staff amid ‘crypto winter’

Fast facts

  • Bitcoin fell 0.9% to US$22,758 in the 24 hours to 8 a.m. in Hong Kong. It’s little-changed at 0.3% lower over the past seven days. Ether dipped 0.1% to US$1,615 and is down 3.1% for the same week period, according to data from CoinMarketCap.

  • Solana lost 3.4% to change hands at US$22.70, bringing its weekly losses to 5.2%. Dogecoin slipped 2.8% to trade at US$0.08, though is up 1.4% for the week.

  • The crypto market capitalization fell 0.3% to US$1.06 trillion, with total trading volume down 1.9% to US$47.9 billion.

  • Bitcoin’s bullish run so far this year with a gain of almost 40% in about six weeks is showing up in futures bets in the CTFC report. The report shows asset managers held 7,734 open futures positions for Bitcoin as of Jan. 24 and 7,671 of those are long positions, or bets that Bitcoin prices have further to run up. The CTFC report lists trader sentiment in a wide array of financial instruments.

  • U.S. equities fell on Monday. The Dow Jones Industrial Average lost 0.1%, the S&P 500 Index dropped 0.6% and the Nasdaq Composite Index closed the day 1% lower.

  • These declines follow Friday’s report showing a surge in non-farm jobs in January, raising concern the Federal Reserve may keep interest rates higher for longer to damp down inflation. The strong job numbers came after a series of tepid inflation indicators in recent weeks, leaving traders whipsawed in guessing the Fed’s next move. Some pointers on that may come on Tuesday when Fed Chair Jerome Powell speaks at the Economic Club of Washington.

  • Asia markets also got hit by interest rate concerns on Monday with the MSCI Asia ex-Japan index falling 2.4% for its worst day since June last year, according to Reuters. Chinese stocks had their worst day so far this year, exacerbated by tensions rising after the U.S. shot down an alleged Chinese spy balloon. Hong Kong tech stocks fell 3.6% on Monday.

  • U.S. Interest rates are currently at 4.5% to 4.75%, the highest in 15 years, and Fed officials have repeatedly indicated they could raise rates to as high as 5% to bring inflation back down into a 2% range.

See related article: South Korea issues guideline on cryptocurrencies as securities tokens ahead of planned legalization