Bitcoin rally stands

Text size

Bitcoin
and other cryptocurrencies were little changed on Monday, having weathered the weekend without excessive volatility. But the recent rally in digital assets appears to be fading, and crypto traders may have to wait until Friday for the next major catalyst.

Bitcoin price rose less than 1% in the past 24 hours to $27,850, after trading between $27,500 and $28,000 for much of the weekend. The biggest crypto remains shy of a recent peak near $29,000 – its highest since the crypto crash accelerated last summer – and traders still see the $30,000 level as key after a rally which has sent Bitcoin up around $16,500 year-to-date.

“We believe the upward momentum we have been experiencing over the past few weeks is losing its charm as the price has started to consolidate ahead of an important psychological price level of $30,000,” said Naeem Aslam, Chief Investment Officer at Zaye Capital Markets. . “We need to see Bitcoin break very comfortably above this price and stay above this price if the rally is going to continue its journey.”

A lack of liquidity in crypto markets – a trend sparked by the collapse of FTX in November and exacerbated by the failure of two crypto-focused banks in recent weeks – ushered in volatile trading over the weekend, when the volume is lowest. While Bitcoin has seen choppy action since Friday, it has largely held around the $28,000 area, which it reached less than two weeks ago.

Cryptos have forged ahead over the past month despite increasing regulatory headwinds, with digital asset companies like

Coinbase global

(symbol: COIN) in the face of threats of American repression. Developments on the legal front could be a near-term catalyst, but cryptos will likely continue to be the most susceptible to macro forces.

Expectations that the Federal Reserve will shift to more accommodative monetary policy, slowing interest rate hikes in its fight against inflation, have been driving the latest crypto rally. Bitcoin has moved in step with stocks as the primary indicator of risk sentiment, and should continue to react alongside the

Dow Jones Industrial Average
And

S&P500
to economic data and news from central banks.

Crypto traders may have to wait until Friday for a big move, with major economic data limited until the end of the week. The Personal Consumption Expenditure (PCE) index, which is the Fed’s preferred measure of inflation, will be released on Friday.

Beyond bitcoin,

Ether
– the second-largest crypto – was down 1% at $1,750. Smaller cryptos or altcoins were also weaker, with

gimbal
And

Polygon
lose 2% each. Memecoins were also in the red, with

Dogecoin
down 2% and

shiba inus
lose 1%.

Write to Jack Denton at [email protected]