But the largest cryptocurrency by market cap was way way off last week’s levels amid light weekend trading and escalating tensions about a possible war with Russia; ether and most other major cryptos dropped.Read MoreFeedzy
Good morning. Here’s what’s happening:
Market moves: Bitcoin rose slightly on Sunday but was still way off its price of a week ago; most major altcoins dipped over the weekend.
Technician’s take: BTC was confined to a tight range over the weekend. Indicators are neutral, although oversold conditions could keep short-term buyers active.
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S&P 500: 4,418 -1.9%
IA: 34,738 -1.4%
Nasdaq: 13,791 -2.7%
Gold: $1,858 +1.7%
Bitcoin inched upward on Sunday but remained well off where it started the week amid investors’ concerns about ongoing inflationary pressure and a possible war with Russia.
At the time of publication, the largest cryptocurrency by market capitalization was trading at about $42,200, up slightly over the past 24 hours. Ether and other major altcoins fell. Ether was trading at about $2,880, off slightly.
“Overall, crypto is down this week, including a slide in prices Friday that some believe is correlated to reports of Russian military exercises indicating that an invasion and possible resulting war is imminent,” said Joe DiPasquale, the CEO of fund manager BitBull Capital.
Trading volume for the past week was about half its level of a year ago, leading to the high price volatility. “This week has seen the prices of major cryptos both rise and fall sharply,” DiPasquale said.
Crypto’s choppy performance has largely emulated major stock indexes, which fell sharply on Friday. The S&P 500 dropped nearly 2% on Friday and the tech-focused Nasdaq plummeted 2.7%.
To be sure, bitcoin and ether are up in February after a lackluster first month of the year, although solana and other altcoins are down “due to jitters over insecurities in the Wormhole protocol,” DiPasquale noted.
He added that “anything can happen” if bitcoin approaches $40,000 because of the lower trading volumes. “If the support. line holds, we could see a large bounce, but it does not we could see a significant drop,” he said.
Bitcoin (BTC) sellers were active after buyers failed to sustain a break above $45,000 this week. The cryptocurrency was roughly flat over the past 24 hours and was confined to a tight range over the weekend. Initial support at $40,000 could stabilize pullbacks.
The relative strength index (RSI) on the daily chart approached oversold territory on Wednesday, which preceded the recent downturn in price. On the weekly chart, however, the RSI is rising from oversold levels similar to what occurred in March 2020, which could keep buyers active over the short term.
Momentum indicators improved on the weekly chart after BTC rose 4% over the past seven days. That suggests a neutral outlook so long as support holds above $35,000-$40,000 over the weekend.
Still, the monthly chart appears bearish similar to July 2018, which was the middle of a crypto bear market.
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“Without programmability or access to a public blockchain, existing stablecoin users are unlikely to be won over or to see the value proposition at all. But CBDCs could still be attractive, if they manage to solve interoperability issues between countries’ financial systems.” (EY Global Blockchain Leader Paul Brody for CoinDesk) … “It’s topsy-turvy. It’s a very uncertain moment of time in the markets as we face a lot of crosscurrents that, frankly, a lot of investors of the current generation have never seen before.” (Jackie Cavanaugh, portfolio manager of the Putnam Focused Equity Fund at Putnam Investments, in The Wall Street Journal) … “The recent tumult in stock markets has brought the fairground metaphors flooding back. Should equity investors brace for a sickening lurch downwards? And as they plummet, will the groaning girders beneath them – the infrastructure underpinning markets – hold firm? The structure of finance has changed dramatically since the financial crisis of 2007-09.” (The Economist) … “It [inflation] kind of cascades from initially a small set of goods to a much larger set of goods.” (Former SEC chief economist, and now Carnegie Mellon professor, Chester Spatt in The Wall Street Journal)
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