Bitcoin is stable despite the bankruptcy of Genesis. Two signs that traders are bullish.

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Bitcoin prices weren’t terribly shaken by news of the bankruptcy of crypto lender Genesis. The time of dreams

Bitcoin and other cryptocurrencies were flat on Friday despite news that lender Genesis was filing for bankruptcy, the latest in a long string of crypto firm bankruptcies. In fact, there are several signs that traders remain bullish after a recent rally.

The price of Bitcoin has risen 1% in the past 24 hours to just under $21,000. The biggest digital asset has consolidated above the key $20,000 level, hitting nearly $21,500 in recent days after surging more than 20% in just a week to hit the highest levels since 2018. collapse of crypto exchange FTX in November.

Bitcoin’s steady gains in recent days belie its correlation to the stock market, where the Dow Jones Industrial Average and S&P 500 have seen three consecutive days of declines as investors fret over the prospects of a recession.

Not even the news that the loan arms of Genesis, which sits at the heart of the institutional crypto business filed for bankruptcy, has shaken traders’ confidence. While prices fell slightly on Thursday as bankruptcy fears grew, the reaction was muted as investors continue to be optimistic that digital assets have suffered the worst of a brutal bear market.

After a months-long crypto blizzard following the FTX crash, the crypto market has cautiously rallied to start 2023, analysts at crypto exchange Coinbase Global (ticker: COIN) wrote in a report. note. It’s hard to say if this is a temporary reprieve or if the crypto winter is starting to thaw Bitcoin surged above $21,000 propelled by economic data and a modest boost in investor confidence.

There are two key signs that crypto traders are bullish.

The first is that they bet more money. The average trade size on a major exchange rose from $700 to $1,100 between January 8 and January 17, according to crypto data provider Kaiko, signaling growing confidence.

The second is the dissipation of fear in the market. The Crypto Fear and Greed Index rose to 51 on Friday from 45 on Thursday, on a scale of 1 to 100 where 1 signals extreme fear and 100 signals extreme greed. This closely watched index hit its most bullish levels this week since early April 2022, when Bitcoin changed hands at two and a half times Friday’s levels.

Beyond Bitcoin, Ether is the second largest cryptorose 2% at $1,550. Smaller cryptos or altcoins were also bullish, with Cardano up 2% and Polygon up 1%. Memcoins were more mixed, with Dogecoin roughly flat and Shiba Inu jumping 3%.

Write to Jack Denton at [email protected]

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