Bitcoin Prices Are Rising, but Cryptos Can’t Stop Treading Water

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Bitcoin was one of the few cryptos notching gains over the past 24 hours. Dreamstime

Bitcoin prices edged higher on Thursday but the wider cryptocurrency space was little moved as digital assets face headwinds from a complex macro picture.

Bitcoin rose less than 1% over the past 24 hours to around $41,800, continuing to inch higher after a recent selloff. Prices for the leading crypto fell below $39,000 at points on Monday, before bouncing back above $40,000 on Tuesday and rising again on Wednesday.

“The digital currency market is experiencing a mix of both upswing and downswings,” said Alexander Mamasidikov, the co-founder of digital bank Mineplex. “Bitcoin is trading in a positive zone … the positive growth momentum in the digital currency is a continuation of the rejuvenation recorded yesterday when bitcoin printed its highest price in more than seven days.”

From a technical perspective, there are signs that bitcoin could keep gaining.

Katie Stockton, managing partner of technical research group Fairlead Strategies, told Barron’s that bitcoin prices were crucially holding above the key $40,000 level. The largest crypto “has generated an oversold ‘buy’ signal from the daily stochastics after a three-day rally, supporting a short-term bullish bias,” Stockton said.

Ether was more muted than its bigger peer bitcoin, with the token underpinning the Ethereum blockchain network down less than 1% to below $3,100. Ether slipped below $2,900 in the depths of Monday trading but surfaced above $3,000 on Tuesday.

“Altcoins,” or smaller cryptocurrencies, were similarly mixed. Solana fell 2%, luna was just below flat, and cardano retreated 1%. “Memecoins”—called that because they were initially intended as internet jokes rather than significant blockchain projects—were firmly lower, with dogecoin down 3% and shiba inu 2% lower.

Cryptocurrencies have been trading in a relatively tight range in recent weeks as digital assets have found themselves under pressure from factors pressing mainstream financial markets. While bitcoin and its peers should theoretically trade independently of the likes of stocks and bonds, they have proven to be correlated with other risk-sensitive assets, especially tech stocks.

Broadly speaking, cryptos and stocks have come under pressure from expectations of an aggressive shift in US monetary policy. Markets are bracing for many interest rate increases from the Federal Reserve this year and next as the central bank fights historically high inflation with tighter policy. This will increase the cost of borrowing and is likely to dampen investor sentiment on riskier assets, including cryptocurrencies.

Write to Jack Denton at [email protected]

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