Bitcoin Off 4- Month High Amid Thin Volume
By Laxmikant Khanvilkar
Cryptocurrencies are trading mixed during the last 24 hours, as the investors step back to gauge key macroeconomic data releases this week. Also, the rally in popular cryptocurrency – the Bitcoin is stalled by the news of Genesis filing for bankruptcy protection.
Last Thursday, Bitcoin rallied to its highest levels since August ahead of celebrations for the Lunar New Year holiday throughout Asia. After surging past $23,500 mark it has slipped lower and was last trading near $22,800. Ethereum, on the other hand, crept higher towards $1,650 level.
Analysts are little surprised about Bitcoins recent rally and continue to question over its sustainability. They are of the view, the macroeconomic backdrop (Fed still hiking interest rates as the US heads towards a likely recession) has not improved sufficiently to warrant the recent rally.
U.S. stock futures were trading in a tight range, following a mixed week for major benchmark averages as market participants digested slowing economic data, a lower US Dollar Index and falling yields ahead of major tech earnings.
The cryptocurrencies market capitalization has increased by 0.10% over the last 24 hours, now standing at $1.04 tn. The total trading volume over the same period has decreased by 15.21%, totaling $51.57 bn. In the DeFi sector, the volume is currently at $4.99 bn, representing 9.67% of the total crypto market 24-hour volume. Stablecoins, meanwhile, account for 88.39% of the total crypto market 24-hour trading volume, with $45.58 bn. Bitcoin’s dominance has dropped 0.31% and is currently at 42.03%.
Ahead in the week, investors will be bracing for a busy week of economic events including preliminary Manufacturing and Services PMIs, core durable goods orders, the preliminary Q4 GDP reading, initial jobless claims, new home sales, PCE price index, Michigan consumer sentiment and pending home sales data.
Meanwhile, the standoff over the U.S. debt ceiling looks likely to loom large over financial markets as earnings season continues.
An interesting insight was provided by Markus Thielen, of Matrixport.
“Buying Bitcoin at the end of the first day of Chinese New Year and selling it 10 trading days later would have returned +9%, on average, with all of the last eight years (2015-2022) showing positive returns,” said Markus Thielen, head of research at Matrixport, in a note Friday. “The beginning of the Chinese New Year has been an attractive entry timing for long positions.”
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