It is a red day for the criptocurrency markets with only 0 X and ApeCoin bucking the trend. Doge coin is the most significant loss of the top ten, down almost 10%.
Stablecoins, BNB and SOL fared best at 3%.
Europe is rising in preparation for trading to open on April 27 due to tumbling Asian stock indexes, according to Reuters.
The correlation between criptocurrency and stocks is hard to deny.
The data shows the 40 day correlation between the market leader,Bitcoin, and the tech-heavy Nasdaq, hitting 0.6945 the highest level since records began.
Since the health crisis, the report says that the Nasdaq andBitcoin have tended to move in sync. The couple is now in unison more than ever. The mirrored movements contradict the narrative thatCryptocurrencies are a safe haven or a hedge against economic downturns.
Financial markets are contending with multiple risks, including the possibility of the Fed hiking interest rates, a slowdown in China, a surging global inflation, and the conflict in Eastern Europe.
Dylan LeClair, Head of Market Research atBitcoin Magazine, said the markets are being behaved as a result of a global deleveraging event. Develervaging is where entities try to reduce debt by lowering their total financial leverage. It could take the form of selling assets or cutting costs, which spells trouble for risk-on asset prices.
The DXY goes on a tear.
The dollar index DXY rose by 2.3% over the last seven days to a new high of 102.606, a level not seen since March 2020.
The DXY measures the U.S. dollar's value relative to its most significant trading partners. The loss of purchasing power is not related to the loss of purchasing power through inflation. Global currencies are losing purchasing power, but the dollar is far better than others.
Expectations are that the Fed will lift interest rates to combat inflation as macroeconomic conditions deteriorate. The anticipation of higher interest rates, which would lead to higher yields on U.S. government bonds, is a pull for investors to cycle into the dollar and not to riskier assets, includingCryptocurrencies.