Bitcoin bull run shows signs of wear as crypto investors eye other coins; Omicron, Fed taper loom – Yahoo Finance


The volatile but never boring market for Bitcoin (BTC) has been whipsawed in recent days, as investors ponder whether there are better returns to be had in other cryptocurrencies, even as a new COVID-19 variant and the Federal Reserve's policy outlook shake up the landscape.
With news of the Omicron strain of COVID-19 unsettling investors, Bitcoin shed over 2% on Tuesday as Fed Chairman Jerome Powell dropped several hints that the central bank is growing more attentive to inflationary risks, and may even accelerate its plans to pull back on stimulative bond purchases.
In theory, the rise of a new variant would prompt the Fed to err on the side of more stimulus, which should benefit cryptocurrencies. Still, Bitcoin sold off sharply along with other risk assets last week, and has yet to challenge its record high near $68,000 set earlier this month, off by more than 20% since hitting that peak.
To be certain, Bitcoin is still firmly entrenched in bull market territory. However, other crypto assets, some notably smaller and higher-risk, are seeing growing investment flows, and may be drawing money away from Bitcoin holdings.
Jon Wolfenbarger, a veteran equities analyst, told Yahoo Finance this week that he's using the 250 day-moving average (DMA) to judge whether crypto and other assets might begin long term turns for the worse. 
While stocks, bonds and commodities still traded above their 250 DMAs on Friday, Wolfenbarger cautioned that "there has been enough damage done recently to tell us that we need to be very vigilant for continued weakness that could trip bear market signal," even if the larger uptrend remains intact, he said. 
During the downturn, notable Bitcoin whales like El Salvador, the largest nation state holder of BTC, which is planning to issue sovereign BTC bonds; and MicroStrategy, the largest publicly listed U.S. company, both used the recent correction as a buying opportunity. 
'Further down the risk-curve'
A recent trend indicates more investors are hunting for crypto trading opportunities outside Bitcoin.
Ether (ETH) — a major “Web 3.0” contender integral to the boom in nonfungible tokens (NFTs), decentralized finance and the Metaverse — has logged gains higher than BTC, roughly doubling its performance over the last week. 
Meanwhile, higher risk meme-coins such as Dogecoin (DOGE-USD) and Shiba Inu coin (SHIB-USD) are posting even larger gains. The latter is up over 16% on the day, coinciding with its listing today on the U.S. based cryptocurrency exchange, Kraken.
At least a few crypto investors consider Bitcoin safe haven asset of sorts, largely because of stimulative government policies that feed inflation and devaluation, but its price action suggests its more closely linked to other risk-sensitive assets. Added to that, data suggests that money is rotating out of Bitcoin into other speculative cryptos. 
This pattern is best captured in the ether/bitcoin trading pair, which is trading near levels not seen since 2018, according to Trading View
“A break-out of ETH/BTC would further support the thesis of an observable rotation out of BTC and into more speculative alts[coins]," the asset manager Fundstrat wrote in a research note Monday.
Beyond speculation, ETH is also used to pay transaction fees on the Ethereum blockchain. Its price action relative to Bitcoin also shows why lesser known cryptocurrencies built on top of Ethereum, especially within DeFi, are seeing the most significant gains over the last few weeks.
“When the market is moving and certain sectors are doing well, as they are currently in DeFi assets, then traders add risk and allocate out of the safe haven [bitcoin]” said Bryan Hernandez, President of the DeFi trading app, Structure.
And the initial buying in these smaller cryptocurrencies is much more speculative according to Hernandez. 
“Because smaller DeFi assets tend to be less liquid, they are more affected by moves from powerful players like big VC funds or certain market makers," he added. "The access to credit that these players have gives them an ability to really push the price to new levels that then create awareness and FOMO buying."
Other cryptocurrencies connected to the metaverse via virtual platforms The Sandbox and Decentraland, have seen swings of more than 50% and 25%, respectively, over the last several days.
Contrary to a speculative frenzy, the rotation from Bitcoin to smaller cryptocurrencies suggests a degree of market health according to Mark Elenowitz, president and CEO of the fintech firm, Horizon Fintex.
“Investors are willing to go further down the risk curve for yet-to-be-built projects (i.e. the metaverse) because, again, they view the overall market structure at the moment as trending green.” said Elenowitz.
If the new Omicron-variant does shape buyer demand long term, some investors see a path for Bitcoin to rise in value as an inflation hedge. Yet Craig Erlam, Oanda senior analyst, isn’t so certain. 
First, it isn't clear yet whether central banks will stall tapering enough to change investment growth, the analyst argues. Secondly, higher levels of inflation might cause the market to react in a markedly different way than they have during the early days of the pandemic.
“Everything is hypothetical at this point,” Erlam told Yahoo Finance. “But it's always too convenient to try to pin [Bitcoin] down to one narrative.”
David Hollerith covers cryptocurrency for Yahoo Finance. Follow him @dshollers.
Read the latest financial and business news from Yahoo Finance
Read the latest cryptocurrency and bitcoin news from Yahoo Finance
Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn
Middleboro High School beats Carver in annual Thanksgiving Day football game
Is Pfizer stock a buy after a new Covid variant emerged that could undo its Covid vaccine? Is PFE stock a buy right now?
Bitcoin was the first widely adopted cryptocurrency, a type of digital asset built on blockchain technology and secured by cryptography. Bitcoin achieved a price of $1.00 in 2011, and has since soared over 5,380,000%. After that run, its market value sits at $1.0 trillion, meaning Bitcoin is still worth more than any altcoin.
DEEP DIVE Investors unloaded stocks Tuesday after Federal Reserve Chairman Jerome Powell said it’s possible the central bank will remove stimulus faster than originally planned. Powell, along with Treasury Secretary Janet Yellen, appeared before the Senate Banking Committee.
Decrypt Senior Writer Stacy Elliott joins Yahoo Finance to discuss solana's surge and the latest in the broader crypto market. 
Apple (AAPL) shares closed at all-time highs on Tuesday at $165.30. The stock was up more than 3%, as investors flocked to the iPhone maker amid a broader market selloff.
(Bloomberg) — Fannie Mae and Freddie Mac climbed after their regulator announced that the mortgage giants will be able to back loans worth nearly $1 million in some of the most expensive U.S. housing markets. Most Read from BloombergChina Cash Flowed Through Congo Bank to Former President’s Cronies‘Pension Poachers’ Are Targeting America’s Elderly VeteransReliving the New York Subway Map DebateReflecting the surge in home prices during the Covid-19 pandemic, Fannie and Freddie will be able to b
Fast forward, and BTC dropped below the trigger level the very day after I shared my update and reached $53,332 yesterday. Bingo?! With the rally over the past several hours, it sure looks that way, so let us have a look at the charts.
Jennifer Hudson joins the likes of several other musicians in the 2022 Pirelli calendar. For the new edition of the renowned calendar, Hudson donned a sparkly black mini dress. Her hair styled in tight coils complimented her bold lip and smoky-eye. Her shiny dress was complete with diamond chandelier earrings. The soulful songbird elevated her embezzled look with a pair of black thigh-high latex boots, which elevated her look perfectly.
Popular meme token Shiba Inu (SHIB) has seen a 36% price rally following its listing on cryptocurrency exchange Kraken and reported rumours regarding the release of a potential ‘metaverse’ game.
Facebook parent company Meta is losing its top crypto executive later this year. David Marcus who leads crypto unit Novi and previously helmed the company's Messenger unit, announced Tuesday that he will be leaving the company later this year. Marcus joined Facebook in 2014.
David Marcus, a top executive at Facebook parent Meta Platforms Inc. who helped develop the forthcoming Diem digital currency, is leaving the company to pursue other projects. A former PayPal Holdings Inc. executive who joined Facebook in 2014, Marcus oversaw the Messenger service before sliding over to form the company's blockchain division in 2018. Marcus built Novi, the company's digital wallet that debuted in October, and co-created Diem, formerly known as Libra. The technology allows people
(Bloomberg) — Crypto billionaire Mike Novogratz wants to help New Yorkers offer advice to Eric Adams when he becomes mayor in January.Most Read from BloombergChina Cash Flowed Through Congo Bank to Former President’s Cronies‘Pension Poachers’ Are Targeting America’s Elderly VeteransReliving the New York Subway Map DebateNovogratz’s Galaxy Gives is working with the Robin Hood Foundation, the Ford Foundation and other philanthropic groups to form NYC Speaks, a $2 million effort to solicit input f
How marketers can engage with crypto-minded people.
Cryptocurrencies are gaining adoption as payment methods in various industries, and luxury products is another fast-growing area.
David Marcus is the latest crypto executive to leave the Facebook parent as it tries to build a digital-payments business and develop the Diem stablecoin.
Bitcoin was able to recover after an extreme decline on November 26, 2021. BTC was able to regain almost all of the losses and looks like it is getting prepared for another bullish run.
Leading digital currency asset manager Grayscale has today unveiled the latest addition to its array of investment products – the Grayscale Solana Trust.
President Biden traveled to Minnesota Tuesday to highlight aspects of his $1 trillion infrastructure plan. Mr. Biden's trip comes as concerns over the new COVID-19 variant, rising inflation and issues within the nation's supply chain threaten to derail his overall economic agenda. CBS News senior White House correspondent Weijia Jiang joins CBSN's Ed O'Keefe to discuss.
Ether (ETH) is outperforming bitcoin (BTC) along with other alternative cryptocurrencies (altcoins), indicating greater appetite for risk among investors. Trading conditions were choppy following comments from Fed Chair Powell.


Leave a Reply

Your email address will not be published. Required fields are marked *

Previous Post

Leapfrogging Legacy Banking To A Bitcoin Standard – Bitcoin Magazine

Next Post

Why the price of bitcoin is falling, according to CoinDesk Global Macro Editor – Yahoo Finance

Related Posts