Bitcoin has a ‘massive uphill battle to fight’ to retake earlier levels, Wolfe says
Even with all the upbeat sentiment in crypto lately, bitcoin price action has been lethargic for weeks and the market isn’t giving any signs that a change is coming, according to Wolfe Research. Bitcoin reclaimed the $30,000 mark about a month ago after BlackRock filed to launch a spot bitcoin ETF and has shown resilience at that level but has also struggled to move higher, which has perplexed investors. They saw the big wave of institutional endorsements as a glimmer of hope for crypto’s regulatory climate and recent weakness in the U.S. dollar, which usually has an inverse relationship with bitcoin, as positive catalysts for the cryptocurrency. “Crypto still has struggled to see a meaningful run,” Wolfe Research strategist Rob Ginsberg said in a note Wednesday. “We have continually touched on the dominance of bitcoin within the space, and while that remains true (up 80% YTD), that gain still only has it sitting at last June’s levels.” A crypto asset’s “dominance” measures how much of it makes up the total cryptocurrency market cap. Investors use it to determine which parts of the crypto market are outperforming or underperforming relative to their peers and to identify changes in trend. “Bitcoin once again reached the $30,000 level and consolidated, failing to take advantage of the pullback in the dollar,” Ginsburg said. “The coin still has a massive uphill battle to fight if it plans on retaking former levels. … While we remain bullish long-term, the deteriorating near-term momentum does not imply a breakout is on the horizon.” Ginsburg also noted that investors seem to be betting on more upside in bitcoin, with futures contracts tied to the cryptocurrency over the past two weeks being their two highest consecutive weeks on record, he said. Bitcoin dominance has fallen since Ripple’s court victory last week, in which a federal judge ruled that the private XRP token is not a security when sold on an exchange, but is a security when it’s sold to institutional investors. Other altcoins , especially those considered securities by the SEC per the agency’s recent lawsuit against Coinbase, have been climbing since while bitcoin has remained at a standstill. Crypto equities — miners Marathon and Riot , crypto exchange Coinbase , and bitcoin proxy Microstrategy in particular — have been outperforming bitcoin as well, Ginsburg noted. “As bitcoin has consolidated crypto stocks have gone parabolic. … With attractive setups and further upside seemingly in store, we ask … if you’re a crypto investor, might it be time to just buy the stocks?” —CNBC’s Michael Bloom contributed reporting.
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