Bitcoin dips below $42,000 despite major stock indices posting gains

Bitcoin BTC -2.70% dipped below $42,000, retracing all the gains made after the U.S. Federal Reserve announced its latest rate pause on Wednesday.

The world's largest cryptocurrency by market capitalization is set to close the week lower and break eight consecutive weeks of positive returns. Bitcoin fell over 2% over the past 24 hours to $41,991 at 12:10 p.m. ET, according to The Block data.

Coinglass data shows the pull-back caused almost $16 million worth of long liquidations, whereas only around $8 million short positions were wiped out.

Bitcoin has dipped below the $42,000 level, according to The Block's Prices Page.

Bitcoin's correlation with stocks weakens

The muted price action comes in contrast to a buoyant mood in traditional markets, calling into question the digital asset's tendency to march in lockstep with major equity indices.

Wall Street continued its uptrend since the Fed's decision to pause rates for the fourth time this year at Wednesday's Federal Open Market Committee meeting. The gains made by major equity indices suggest investors are calculating the possibility of rate cuts in 2024, with the CME FedWatch tool now pricing in around a 65% chance of a rate cut in March.

The Nasdaq is up 0.4%, the SP 500 was flat and the Dow Jones Industrial Average increased by 0.1%.