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Twitter’s CFO Comments Make the Crypto Market Sour

Several cryptos are dealing with selling pressure as a result of the anti-crypto comments made by the CFO of Twitter. The bearish outcast was probably increased by the strength of the dollar index.

BTC fell by 4.3% on the day, at about $60,800, while ETH lost 5.3%, having a worth of $4,320. Other cryptos, like DOT, and Litecoin, registered even higher losses.

The selling started in the early hours of the Asian trading after it was revealed that Ned Segal, the CFO of Twitter, declared that investing cash holdings into crypto assets such as Bitcoin “doesn’t make sense” right now. Of course, Segal’s main worry comes from crypto’s infamous volatility, but also due to a lack of accounting rules for the market. These are the reasons for which Twitter didn’t diversify into crypto as of yet.

People weren’t expecting Twitter to confirm any crypto investments, but the comments by Segal seem to have offered a reason for traders to take some risk off the table as a result of the increasing price of the dollar and contentious crypto tax reporting requirement that came with the $1 trillion bipartisan infrastructure bill that was signed into law by the president of the US, Joe Biden, yesterday.

While companies such as MicroStrategy, Tesla, or Square own bitcoin as a reserve asset, the long-awaited widespread corporate adoption of crypto still seems to be a long way from reality.

The dollar index recorded a new 16-month high of 95.50 earlier today as a result of the fears that the Federal Reserve could resort to early interest rate hikes in order to keep inflation under control. Interest rate hikes are usually seen as being bullish for domestic currencies and weigh over so-called inflation hedges such as gold and bitcoin. Both gold and Bitcoin are priced in US dollars which means that an increase in the value of the dollar is seen as being bearish for crypto.

China’s National Development and Reform Commission stated that it takes into consideration “punitive electricity prices” for some crypto mines as part of the follow-up to its crackdown on crypto mining.

Analysts believe that bitcoin may have to deal with a deeper drawdown in the short term, at least.

Matthew Dibb, the COO, and co-founder of Stack Funds, declared:

“We have noticed some larger sales occur on Bitfinex as well as openings of new short positions. While liquidations [forced closure of long positions] so far are quite low by historical standard and funding rates are approaching flat, we could see a further cool-off in BTC for the short term as momentum is beginning to stall.”

An options trader from Pulsar Trading Capital, Martin Cheung, believes that the downward move is a healthy correction and that it could reach $60,000 or even $55,000: “We have been seeing bearish flows in the options market from late last week. Put-call skews have flipped bearish.”

The one-month put-call skew has increased to a four-week high from -2% to 5%. At the same time, the one-week gauge went from 1% to 6%.

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