Bitcoin Fluctuates With Investor Risk Sentiment Waning

The largest cryptocurrency by market value was little changed after declining as much as 2.5% to $45,583 on Monday in New York. It has slumped about 30% since setting a record high in early November. Ethereum edged higher, while popular DeFi tokens such as Solana, Cardano, Polkadot and Polygon also swung between gains and losses.

Central banks globally are prioritizing the fight against elevated inflation by tightening monetary settings, while also keeping a wary eye on the impact of omicron. That backdrop has investors questioning whether so-called risk assets such as cryptocurrencies and technology shares are due for a rougher patch after surging from pandemic lows.

Bitcoin is also facing some price levels that technical analysis watch for signs of future direction. The digital currency is sitting at its 55-week simple moving average. The token has typically bounced higher the past several times it reached the level.

Katie Stockton, founder of Fairlead Strategies, is eyeing $44,200 as a support level for the cryptocurrency. If that level is broken, "important long-term support at the bottom boundary of the weekly cloud will likely be tested, near $37K," she said.