The surprise U.S. Federal Reserve rate cut Tuesday corresponded with a spike in positive cryptocurrency trading, with a jump of 1,699 trades in one hour on Coinbase. However, bitcoin’s 10-day moving average crossed below the 50-day average at around 12:00 a.m. UTC, falling even though Tuesday’s trading action pushed prices back up into the $8,800 range.
The subsequent holding pattern for bitcoin prices can be attributed to jittery trading sentiment related to coronavirus fears, according to Alex Mashinsky, chief executive of cryptocurrency lender Celsius.
“Recent volatility in crypto markets has been driven by speculators responding to the virus, liquidating and withdrawing their cash or going long on margin. This group is a small part of the crypto community, but they continue to wield an outsized effect on prices,” said Mashinsky.
The U.S. central bank rate cut, an emergency measure taken because of concerns about the coronavirus possibly slowing the economy, did not initially help the S&P 500 Index. It was down 2.81 percent at Tuesday’s close. It rebounded toward the middle of trading on Wednesday.
Bitcoin has stayed below the $9,000 level since it dropped 7 percent on Feb. 26. However, prices remain positive for 2020, up 21 percent compared to the S&P 500’s decline of 5 percent.
Other notable movers in the cryptocurrency markets include decred (DCR) up 5 percent, bitcoin SV (BSV) in the red 8 percent and ethereum classic (ETC), down 7 percent.