Bitcoin
traded below $24,000 on Friday to end what has been a solid week for the world’s largest cryptocurrency.
Bitcoin has fallen 3.7% to $23,734 over the past 24 hours, according to CoinDesk. It has moved higher this week, getting a boost from data that showed inflation has been cooling in the U.S., which in turn has taken some pressure off the Federal Reserve as it raises interest rates to slow down the economy.
Bitcoin and its peers should, in theory, trade independently of mainstream finance, but they have proved to be largely correlated to other risk-sensitive assets like stocks. Wall Street has risen this week as investors have begun to entertain thoughts that the Fed may be able to engineer a soft landing for the U.S. economy.
Craig Erlam, senior market analyst at Oanda, said the relatively calm end to the week for Bitcoin may not be good news for the crypto in the short term “as it may encourage some profit-taking into the weekend.”
He said it was interesting that at current levels there was little momentum in Bitcoin’s rallies, “which is going to make $25,000 very difficult to overcome.”
Erlam asked: “Is that a sign that we’re seeing some profit-taking or that the correction has run its course and further downside pressure is on the horizon?”
Ether,
the second-largest token, fell 2.3% to $1,875 over the past 24 hours. The token underpinning the Ethereum blockchain network came off sharp gains from Thursday after it passed its last test before a major upgrade.
The planned network upgrade, known as “The Merge,” was expected to take place on Sept. 19, but Ethereum developers have been saying they anticipate the upgrade either Sept. 15 or 16.
Write to Joe Woelfel at joseph.woelfel@barrons.com
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