Bitcoin and other cryptocurrencies were largely unchanged on Monday, with digital assets continuing to trade at depressed levels following a stark selloff this year.
The price of
rose less than 1% over the past 24 hours to around $19,100. The largest crypto has failed to consistently breach $20,000 since plunging through that key mark last Tuesday. Bitcoin continues to trade at less than one-third its all-time high near $69,000, reached in November 2021, but has held above $18,000, the bottom it hit during the trough of a selloff in mid-June.
“A plethora of bearish crypto headlines continues to drag down Bitcoin below key technical levels,” Edward Moya, an analyst at broker Oanda, wrote in a note Friday.
The second-largest digital asset, fell less than 1% but was holding above $1,000. The token underpinning the Ethereum blockchain network remains far below its all-time high last November near $4,900.
Smaller tokens, called altcoins, exhibited more of the same.
both gained about 1%. Memecoins—initially intended as internet jokes—were slightly stronger similarly, with
both up more than 1%.
Bitcoin just capped its worst quarter since 2011, a year in which it breached the $1 mark for the first time, while Ether notched its worst quarter on record. The market capitalization of digital assets has crumbled from nearly $3 trillion just 8 months ago to less than $900 billion.
Downward pressure on prices have come, in part, from crypto itself, with the meltdown of stablecoin Terra, breakdowns in the digital asset lending space, and the bust of a major hedge fund—threatening wider contagion.
But stocks have also proved a problem for cryptos. Bitcoin and its peers should, in theory, trade independently of mainstream finance. In reality, they have shown to be correlated to other risk-sensitive assets, like stocks and especially tech stocks.
And stocks are in a bear market, with the
down 20% this year and the tech-heavy
30% in the red. The S&P 500 just finished its worst quarter in more than 50 years.
At the heart of the selloff has been fears that the Federal Reserve and other central banks will be unable to avoid spurring a recession as a result of much tighter monetary policy. Facing the highest inflation in the decades, the Fed has already moved aggressively to raise interest rates and is expected to continue doing so, risking plunging the US into a slowdown by denting economic demand. A recession would be unkind to risky bets like Bitcoin, to say the least.
With US investors on holiday for the Fourth of July, trading in the world’s most important market is on pause. It is expected to be a quiet day in global markets, and— given the correlation between stocks and cryptos—digital assets are likely to also be subdued until Tuesday, when US investors return.
“Sentiment will take some time to improve, especially after many anticipated crypto deals are falling apart,” Moya added. “How low Bitcoin goes depends on whether the stock market made a bottom and if no major crypto company falls into liquidation.”
Write to Jack Denton at [email protected]