Bitcoin stock ( BTC:USD ) –0.76% and other cryptocurrencies have consolidated gains from a recent rally that swept digital assets to their biggest move higher in more than a month. The short-term picture looks relatively solid, but cryptos remain vulnerable to another swing lower.
The price of Bitcoin stock has had little change over the past 24 hours at around $20,600.
The largest crypto jumped higher late Tuesday in a rally sparked by the stock market and accelerated by a wave of short-sellers—traders who bet against Bitcoin—being forced to cover their losses and buy the token. Bitcoin has largely traded in the $19,000 to $20,000 range since early September amid a period of uncharacteristic calm, so the recent pop to as high as $20,800 in part represents a return of volatility for cryptos.
“Crypto will struggle with a deteriorating global growth outlook, but extensive pain as a result of the bond market selloff could be ending soon,” said Edward Moya, an analyst at broker Oanda.
Higher yields on government bonds make the returns on risk-sensitive assets like cryptos and stocks less attractive, and yields have charged higher this year amid the Federal Reserve’s interest-rate increases to fight inflation. Yields have fallen back over the past week amid hopes that the Fed will soon communicate a slowing of its aggressive tightening of financial conditions, buoying stocks and cryptos.
A looming catalyst for markets is the Fed’s monetary policy decision, including what is expected to be a fourth super-size interest-rate hike, next week.
However, cryptos remain vulnerable.
Bitcoin Stock Analysis
The same force that catapulted Bitcoin stock higher this week—traders using leverage, or borrowed money, which exacerbates price moves—remains, but this time the crowded trade is bullish on Bitcoin stock, not bearish. The tota...
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