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Bitcoin Rises. But Don’t Get Too Excited as Crypto Market Is ‘Looking Shaky.’

Bitcoin prices have sunk this year, dropping more than 75% from the November 2021 record high.

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Ozan Kose/AFP via Getty Images

Bitcoin
and other cryptocurrencies were higher Wednesday, benefiting from an improvement in investor sentiment after the stock market snapped a multi-day losing streak and were poised for more gains going into the holiday period.

Crypto traders, however, are positioning for more turbulence with the digital asset space still under pressure.

The price of Bitcoin has ticked up less than 1% over the past 24 hours to $16,875, moving higher from a recent trough below $16,500 on Tuesday. Digital assets were following the stock market higher, with the
Dow Jones Industrial Average
and
S&P 500
set for gains on Wednesday after the indexes on Tuesday snapped a four-day losing streak.

“Given the reaction across other asset classes, Bitcoin’s rally is somewhat unimpressive as crypto traders continue to remain in wait-and-see mode over what will be the next big crypto domino to fall or if we get any clearer guidance over the regulatory front,” said Edward Moya, an analyst at broker Oanda.

Cryptos and equities have become increasingly correlated amid 2022’s tough macro environment of high inflation, rising interest rates, and looming recession risks.

“The macro headwinds appear to be getting more troubling, and the Bitcoin and crypto market is looking shaky right now. Increasingly it seems as though we might experience another leg down,” said R.A. Wilson, the chief technology officer at token exchange 1GCX. 

Beyond Bitcoin,
Ether
— the second-largest token — rose less than 1% to above $1,200. Smaller cryptos or altcoins were lower, with both
Cardano
and
Polygon
about 1% in the red. Memecoins were similarly downbeat, with
Dogecoin
and
Shiba Inu
each shedding some 1%.

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

Credit: marketwatch.com

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