Macro and technical headwinds accrue for bitcoin
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(Reuters) - A weak start to 2022 and a host of looming macro and technical headwinds are setting cryptocurrencies up for a rough ride in the weeks to come.
The biggest of them, bitcoin, has not managed to hold above the
Far from being the hedge against inflation or the uncorrelated alternative asset it was sometimes plugged as, bitcoin has suffered disproportionately, losing 40% from its peak in November, as the Federal Reserve and other major central banks spelt out plans to raise rates and remove monetary stimulus.
"There's more correlation than some people might like between the crypto sector and the more traditional markets," said
Justin D'Anethan, a
Investors had turned to favouring "puts" even in options, he noted.
On analytics platform CryptoQuant, the bitcoin leverage ratio across exchanges has risen to 0.22 from 0.15 a month ago.
Bitcoin's market capitalisation has dropped to around
Crypto data platform Coinglass's bitcoin Fear & Greed index last week touched its lowest level since
Analysts
Yet, among a mixed bag of indicators, they pointed to the slowing growth in bitcoin open interest as suggesting hesitation among investors and a positive funding rate for perpetual futures as a sign traders are still willing to pay, albeit low amounts, to keep their bitcoin longs.
Even as stocks linked to cryptocurrencies broadly mirrored the fall in prices of digital assets, a few stocks managed gains as they announced new ventures and offerings.
Shares of meme stock GameStop Corp (GME) jumped 7% on Friday on plans to launch a division to develop a marketplace for NFTs and establish cryptocurrency partnerships.
Blockchain infrastructure firm BTCS surged over 44% on
(Reporting by