Bitcoin traded once again around the $20,000 level, moving in tandem with weakening stocks amid mounting concerns about a global recession.
The largest cryptocurrency declined as much as 4.3% to $19,947, before settling in around as of 9:23 a.m. in London. Ether fell by a maximum 5% to $1,066.02. Shiba Inu, the 14th-biggest cryptocurrency by market value, rallied 14% in the past 24 hours though its momentum was tailing off, according to pricing from CoinGecko.
“Bitcoin has made ‘a bottom’ but probably not ‘the bottom’,” said Mark Newton, head of technical strategy at Fundstrat Global Advisors. “Upside targets should materialize near $23,300 with a max near $24,800 before prices pull back to likely challenge lows into the final week of June.”
Cryptocurrencies have been moving for months in the same direction as stocks, and Wednesday’s moves were no exception as investor appetite for risk assets ebbed on growing fears about an economic downturn. Bitcoin appears to be consolidating around the $20,000 level, similar to its action around $30,000 for much of May and into June.
The move off of sub-$20,000 lows occurred as broader risk sentiment stabilized and speculative investors await their next trading prompts, Informa Global Markets wrote in a note Tuesday.
The firm added that data from on-chain analytics firm Glassnode shows that as of June 20, 56.2% of addresses were still worth more in dollar terms than when their coins entered them, which Informa said raises questions about the severity of the current bear market. That’s compared with recent Glassnode data showing the average purchase price of all Bitcoins in circulation was around $23,430 — so, above current levels.
Still, it’s the bigger picture that’s really driving Bitcoin’s price, Informa said.
“Macroeconomic conditions need to improve and the Fed’s aggressive approach to monetary policy has to subside before crypto markets see a bottom,” the firm wrote.
© 2022 Bloomberg L.P.