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Cryptography prices have plummeted in recent months, but prices have recently risen.
The hour of dreams
Bitcoin and other cryptocurrencies were trading on Tuesday, with prices faltering amid investor fragility after a stock market crash on Monday.
The price of Bitcoin rose slightly over the past 24 hours to $ 22,171, after rising to $ 22,700 on Monday. Bitcoin continues to hold around the highest levels since a sale in mid-June made the largest cryptocurrency as low as $ 18,000 from $ 30,000, and is changing hands at less than a third of its all-time high, close to $ 69,000 for the past eight months.
“While Bitcoin experienced a positive boost this week, it remains limited when it takes a broader view and is still struggling to overcome the $ 22,000 resistance,” said Joe Diasquale, CEO of cryptocurrency asset manager BitBull Capital.
Following a recent cryptocurrency rally, market participants are pondering whether digital assets have bottomed out after a brutal period.
Bitcoin has just closed its worst quarter since 2011, a year in which it surpassed $ 1 for the first time, and the total market capitalization of the cryptocurrency space has sunk to $ 1 trillion from nearly $ 3 trillion of dollars in November 2021.
“For now, we remain interested in the lower part of that range in terms of the price of Bitcoin and we are monitoring the build-up during this limited movement,” DiPasquale said. “If Bitcoin does not decompose from this range at the end of the month, especially post the [Federal Reserve’s monetary policy meeting ending July 27]we could see it as a strong sign of a potential long-term fund. “
Cracks in the crypto ecosystem, such as the failure of the stable Earth currency and the collapse of the high-flying hedge fund and institutional borrower Three Arrows Capital, have increased pressure on digital assets. But so do macro pressures and the clear correlation of Bitcoin with other risk-sensitive assets such as stocks.
Bitcoin has followed the S&P 500 and Nasdaq down in recent months as investors have worried about the risk of recession. Faced with higher inflation in decades, the Federal Reserve has already moved aggressively to tighten monetary policy and raise interest rates, at the risk of causing a recession, which would be an unpleasant environment for risky bets like Bitcoin.
Shares led to a rebound late last week and initially tried to continue on Monday before everything collapsed and indices ended lower. But the sense of risk seems to have made at least some permanent improvement.
“Wall Street enjoys a positive risk mood that is good news for cryptocurrencies,” said Edward Moya, an analyst at broker Oanda. “If Bitcoin continues to stabilize here over the next two weeks, the crypto winter could be over. Market positioning has become extreme and this could allow the bottom to be reached if institutional money adheres.” .
Beyond Bitcoin, Ether, the second largest cryptocurrency, gained 5.1% to $ 1,552. The testimonial that underpins the Ethereum blockchain network has recovered more than 40% over the past week, surpassing Bitcoin. Altcoins, or smaller crypts, were also optimistic, with Solana 7% and Cardano 2% more. Memecoins were more mixed, with Dogecoin around the plain and Shiba Inu increasing by 3%.
Write to Jack Denton at jack.denton@dowjones.com