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Bitcoin prices remain down in the dumps after the crypto’s worst quarter since 2011, a year in which it broke $ 1 for the first time.
Martin Bureau / AFP via Getty Images
Bitcoin
and other cryptocurrencies were relatively resilient on Thursday, holding steady or rising in stark contrast to the stock market which was under pressure. It marks a departure for digital assets, which have been shown to be correlated with equities and vulnerable to even more disadvantages.
The price of Bitcoin has risen less than 1% over the last 24 hours to $ 19,800. The largest crypto fell in line with stocks on Wednesday, reaching $ 19,150, but has since returned to levels seen earlier in the week. Bitcoin continues to struggle to consolidate above the $ 20,000 key limit, after rising as high as $ 22,000 less than a week ago before falling back.
“Bitcoin is showing some signs of stabilizing, but sellers are eager to see if the June lows will hold,” said Edward Moya, an analyst at broker Oanda. Bitcoin found a bottom below $ 18,000 at the bottom of a mid-June sale, and analysts this week have looked at how technical indicators point to a new drop to $ 18,000 – or even below that – in the cards.
What makes Bitcoin’s resilience impressive is that the stock market is not in the same shape. Stock indices closed lower on Wednesday and futures closed
S&P 500
and
Nasdaq
indicates that more of the same pain is on the way Thursday. Bitcoin and its peers should theoretically trade independently of ordinary finance, but over the past year have been shown to be largely correlated with stocks, and especially technology stocks.
The latest route in equities comes in the wake of inflation data on Wednesday, which has ushered in a reversal of recession fears after the US consumer price index for June rose 9.1% annually, the fastest rise in 40 years and above expectations.
With inflation still red-hot, investors are worried that the Federal Reserve will not be able to avoid causing a recession as it fights higher prices by raising interest rates and reducing economic demand. And a recession would be an unfriendly environment for risky games like Bitcoin and other cryptocurrencies.
But digital assets are already down in the dumps. Bitcoin continues to trade at less than a third of the highest record from November 2021 and reached just the worst quarter in more than 10 years. Along with macro factors, cracks in the crypto industry itself have exacerbated price declines, including the meltdown of stablecoin Terra and the failure of the hedge fund Three Arrows Capital.
Several of these cracks came on Thursday after the warring cryptocurrency lender Celsius Network announced it had filed for Chapter 11 bankruptcy while trying to restructure. Celsius, which at one point gave a return of almost 20% on crypto deposits, froze customer withdrawals, swaps and transfers last month when the business model came under pressure in the wake of a decline in the prices of digital assets.
“Token prices are generally firmer this morning, despite news that Celsius, a major cryptocurrency provider, has filed for bankruptcy in the United States, potentially putting hundreds of thousands of crypto investors at risk,” said Steve Clayton, a fund manager at Hargreaves Lansdown.
Ether,
the second largest crypto, got 2% to almost $ 1100. Altcoins, or smaller cryptocurrencies, were more mixed, too
Solana
increases 1% and
Cardano
falls 1%. Memecoins were also weaker, too
Dogecoin
down 2% and
Shiba Inu
1% minus.
Write to Jack Denton at [email protected]
