Sunday, February 5, 2023
HomeMarketBitcoin Is Back Below $17,000. Crypto Traders Can Use a Break.

Bitcoin Is Back Below $17,000. Crypto Traders Can Use a Break.

Bitcoin prices have tumbled dramatically this year.

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Dreamstime

Bitcoin
and other cryptocurrencies were little changed Monday, with uncertain investor sentiment after a selloff last week positioning digital assets for potentially more volatility in the days to come.

The price of Bitcoin has gained 0.5% over the past 24 hours to $16,750. The biggest digital asset climbed to almost $18,500 at the peak of last week’s trading — the highest levels since crypto exchange FTX’s bankruptcy last month rocked markets — but has since slipped back. Bitcoin remains at less than one-quarter of its late-2021 all-time high.

Dragging down cryptos in recent days has been a general souring of investor sentiment amid worries around inflation and the risk of recession. Signs last week that inflation was cooling spurred gains in cryptos and stocks that have since come undone after the Federal Reserve signaled more interest rate increases were coming in 2023 that could cause economic pain.

The correlation between tokens and equities — established amid 2022’s tough macro backdrop — has been a double-edged sword, boosting cryptos amid the gloom following FTX’s collapse but also spurring selloffs when stocks weaken. A slight uptick in crypto prices Monday matches an increase in futures tracking both the
Dow Jones Industrial Average
and
S&P 500
indexes.

The week ahead could bring more volatility. There remains key data in the days to come, including the consumer confidence index, jobless claims, and the core personal consumption expenditures index, which is the Fed’s preferred inflation metric. 

These releases have the potential to move markets, with reactions across stocks possibly muted amid low volumes going into the holiday period, though it remains to be seen whether the 24/7 traders of the world of crypto also will take a break. After what has been one of the worst years for digital assets on record, crypto traders probably need one.

Beyond Bitcoin,
Ether
— the second-largest token — rose 0.5% to above $1,175. Smaller cryptos or altcoins were more muted, with both
Cardano
and
Polygon
down less than 1%. Memecoins exhibited more strength, with
Dogecoin
above flat and
Shiba Inu
3% higher.

Write to Jack Denton at jack.denton@barrons.com

Credit: marketwatch.com

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