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HomeMarketBitcoin Prices Are Weak. Gloom Is Spreading Across Crypto.

Bitcoin Prices Are Weak. Gloom Is Spreading Across Crypto.

Bitcoin prices are changing hands for just a fraction of their all-time high a year ago.

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Bitcoin
and other cryptocurrencies were largely weaker on Friday. The digital asset space continues to face pressure amid the fallout from crypto exchange FTX’s collapse, with signs that gloom is spreading across market participants.

The price of Bitcoin was edging lower, down less than 1% over the past 24 hours to around $16,500. The largest crypto has held above its recent two-year lows near $15,550, hit during peaks of selling amid fears over trouble at FTX and later its bankruptcy—the full effects of which are likely still unknown. But Bitcoin has still fallen some 20% in just weeks and is now trading at less than a quarter of its all-time high near $69,000 from a year ago.

“Bitcoin is edging lower again today after recording three days of gains,” said Craig Erlam, an analyst at broker Oanda. “It’s trying to stabilize around the $15,500-$17,000 region and weather the storm but I’m not sure it will be that easy.”

FTX’s failure has pushed crypto prices, which have already suffered steep declines this year, on their latest leg downward, with the bankruptcy of the once-popular exchange also raising the prospect of tough new regulation.

“There’s likely more to come from the FTX collapse and the contagion effects, not to mention potentially other scandals that could be uncovered,” said Erlam. “This may continue to make crypto traders very nervous and leave the foundations supporting price extremely shaky.”

Cryptos were little changed even as sentiment improved in wider markets, with futures tracking the
Dow Jones Industrial Average
and
S&P 500
moving higher. Digital assets and stocks have become mostly correlated across the past year amid a tough macro backdrop of high inflation and rising interest rates, but that link has faded somewhat amid the recent volatility isolated to crypto.

Indeed, there were clear signs of nerves across the crypto market. The Crypto Fear and Greed Index was at 20 on Friday, indicating Extreme Fear, for the second day in a row. This is as fearful as the index has been since the start of worries about FTX earlier this month, and marks the first time since this bout of volatility in crypto that the index has been at 20 for two consecutive days.

While crypto traders appear nervous, Wall Street and traditional investors continue to pour into bets against any upward move in the price of Bitcoin. The open interest, or active positions, of Bitcoin futures on the CME—a regulated exchange that attracts big-ticket professional and institutional U.S. investors—remains at all-time highs, with the majority of positions betting against Bitcoin.

Beyond Bitcoin,
Ether
—the second-largest crypto—was down slightly on the day to below $1,200. Smaller cryptos or altcoins were more mixed, with
Cardano
up less than 1% while
Polygon
slipped 1%. Memecoins, on the other hand, pushed higher, with
Dogecoin
jumping 12% and
Shiba Inu
popping 4%.

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

Credit: marketwatch.com

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