Bitcoin’s fizzling two-month rally holds a warning for investors
Bitcoin’s subsiding two-month rally contains a warning for investors if history is any guide.
The February jump in the largest digital token has withered to about 2% and pales compared to January’s 39% surge, data compiled by Bloomberg show.
There have been five similar instances since the pandemic low in 2020 when Bitcoin climbed over two straight months but with a smaller gain in the second stanza. It retreated in the third month in four of those cases, posting an average loss of 5.8%. The only exception was a period through February 2021, when the token was in the midst of a powerful bull run.
Bitcoin ended in the red Sunday for the third week in four, hurt by the prospect of higher-for-longer interest rates to damp inflation. A regulatory clampdown in the US after the collapse of the FTX exchange is also squeezing the sector.
“It’s not surprising the market saw some correction” last week, wrote Noelle Acheson, author of the “Crypto Is Macro Now” newsletter, who cited in part dollar strength amid bets on higher borrowing costs.
Bitcoin edged down about 0.6% as of 7:43 a.m. in London on Monday to trade at roughly $23,430. Second-ranked Ether fell 0.4% to $1,636.
SOL, the native token of the Solana blockchain, underperformed with a slide of as much as 2.5%. Solana suffered an hours-long slowdown over the weekend — the latest in a series of outages, technical issues and processing problems that has plagued the network since its debut in 2020.
