Bitcoin snaps three-day winning streak as ‘Risk Rally Parade’ stalls
(Bloomberg) — Bitcoin finished the work week strong, clawing back earlier losses to advance for a fourth day, as bullish sentiment offset concerns over increasing U.S. crypto enforcement and the backdrop of rising interest rates.
Most read from Bloomberg
The biggest digital token rose as much as 2% on Friday afternoon in New York to trade at around $24,780 by 4 p.m., erasing declines that had sent it down more than 4% earlier in the session. The coin appeared poised to breach the $25,000 mark again after piercing that level for the first time since August on Thursday. Smaller tokens such as Ether, Avalanche and Binance Coin also joined the rally, as did an index of the 100 largest coins.
For Frank Cappelleri, founder of CappThesis, helping Bitcoin is the fact that it has formed a higher low on the weekly chart.
“Bitcoin’s ability to withstand the recent downturn is a story in itself,” he said. “And, along with the action since last summer, a potentially large bottom formation could be completed soon.”
Digital assets rose while U.S. stocks fell as traders fully priced in quarter-point interest rate hikes at the Fed’s next meeting, with further hikes of 50 basis points also a possibility. Both the S&P 500 and Nasdaq 100 fell more than 1% during Friday’s session, although they pared losses by the end of the trading day.
“This past week of macroeconomic data rained on the broad-based risk rally parade we’ve seen in recent weeks, including a recent hit on Bitcoin’s stunning YTD growth,” said Sylvia Jablonski, managing director and chief investment officer of Defiance ETFs. “The good news is that inflation is coming down.”
It’s been quite a strong start to the year for Bitcoin, which in 2022 fell 64% in its second-worst annual performance ever. Despite the amount of negative news and the wave of US regulatory actions, the price of the coin has remained resilient. Skeptics argue that the return is vulnerable to the risk of higher-for-longer interest rates, although others see the opportunity for buy-and-hold investors.
“Investors may consider reviewing what the Fed will do this year, knowing we’re nearing the end, and buying on dips in risk assets that may continue to shine later in the year,” Jablonski said.
For crypto market prices: CRYP; for the best crypto news: TOP CRYPTO.
(Updates prices)
Most read from Bloomberg Businessweek
©2023 Bloomberg LP
