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Equities cautiousness holds back crypto again

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Equities cautiousness holds back crypto again


Market picture

Bitcoin rose
to $17350 on Monday but returned to $17200, showing zero momentum over the past
24 hours. The buying was held back by the waning momentum of buying in US
equities.

Fed
officials continue to press the market, warning that they are ready to raise
the rate “markedly above 5%”. Such statements are alarming because
they come after labour market data showed increasing economic weakness.

As the
source of the pressure on Bitcoin is pressure on equities, the overall
capitalisation of the crypto market has not suffered as much, adding 0.3% in
the last 24 hours to 850bn – near the highs of the last four weeks.

According to
CoinShares, investments in crypto funds declined by $10m last week, with
outflows continuing for the third week. Investments in Bitcoin were down $6.5m,
and into Ethereum decreased $3m. Investments in funds that allow shorts on
bitcoin were up $1m.

From the
tech analysis side, the positive scenario remains prevalent as long as Bitcoin
trades above 16800, which coincides with the 50-day moving average and the
local resistance area at the end of December.

News background

Slightly
highlighted is a $3 million influx in XRP, likely due to hopes for a positive
outcome of Ripple’s lawsuit against the SEC. However, CoinShares notes that
trading volumes remain low, and sentiment in early 2023 is moderately negative.

US
authorities are investigating US hedge funds’ ties to cryptocurrency exchange
Binance as part of an investigation into possible anti-money laundering
violations, The Washington Post reports. According to Reuters, attackers
laundered at least $2.35 billion in illicit funds through the exchange between
2017 and 2021.

According to
Beosin, damage to the crypto industry in 2022 from 167 major attacks was about
$3.6 billion, up 47% from a year earlier. Decentralised finance (DeFi) projects
were attacked the most, as security in this sector leaves much to be desired.

This article was written by FxPro’s Senior Market Analyst Alex
Kuptsikevich.

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