Bitcoin
and other cryptocurrencies were little changed over the past 24 hours but have seen volatile trading amid a bumpy stretch in the stock market—and that’s not necessarily a good thing. Digital asset prices look vulnerable at these levels.
The price of Bitcoin was near flat over the past 24 hours at $42,950 early Tuesday, having traded as high as near $43,500 on Monday before plunging to as low as around $42,250 in recent trading. The largest crypto remains well off its recent peak above $48,000, reached last month amid a frenzy over the anticipation and then approval of the first spot Bitcoin exchange-traded funds (ETFs) in the U.S.
“Bitcoin’s correlation with stock market sentiment has risen markedly in recent weeks,” said said Alex Kuptsikevich, an analyst at broker FxPro. “This looks like a worrying sign because stocks are in the late stages of a rally, where abnormally sharp moves in some instruments (
Meta
,
Nvidia
,
Amazon
) are juxtaposed with corrections in most securities.”
Indeed, Bitcoin has whipsawed in step with the stock market since ETF mania has faded, falling alongside the
Dow Jones Industrial Average
and
S&P 500
indexes on Monday but set to steady on Tuesday. Shifting expectations over when and by how much the Federal Reserve will cut interest rates have been driving recent action in equities.
With near-term crypto catalysts moving beyond the world of digital assets to the stock market, Bitcoin faces similar risks as equities—at a time when token prices look vulnerable from a technical perspective.
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“Bitcoin is testing support at [a moving technical level] around $42,300 but rising to $42,900 by Wednesday,” said Katie Stockton, managing partner at technical research firm Fairlead Strategies. “Two consecutive daily closes below [these levels] would confirm a breakdown in a setback for Bitcoin, suggesting it is becoming range-bound from an intermediate-term perspective.”
Beyond Bitcoin,
Ether
—the second-largest crypto—gained less than 1% at $2,330. Smaller tokens or altcoins were more mixed, with
Cardano
down 1% but
Polygon
popping 1%. Memecoins were muted, with
Dogecoin
and
Shiba Inu
shedding 1% each.
Write to Jack Denton at jack.denton@barrons.com
