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Cryptocurrency market capitalization crossed $1 trillion on Wednesday morning for the first time since November 8.
This latest crypto rally was led by Bitcoin (BTC-USD), which briefly surged to $21,501 at 9:15 am ET. Bitcoin is up more than 20% since trading just a week ago, and is up about 30% so far this year.
Shortly after achieving his milestone, cryptocurrency prices fell along with the broader market. Bitcoin was trading near his $21,000 at around 12:20pm ET.
With the collapse of FTX in early November, cryptocurrency prices plummeted, with the industry’s market cap dropping to its most recent low of $796 billion on November 9. Since this date, the market capitalization of cryptocurrencies has risen by more than 20%. Still, the overall market is about 50% lower than it was a year ago.
Ethereum (ETH-USD), the second-largest cryptocurrency, is up about 23% in the last month, while Bitcoin is up 28%. Ether closed just below $1,600 per coin at Wednesday morning highs.
“Momentum in Bitcoin and Ether remains the driving force behind the global macroeconomic mix, combined with the diminishing threat of inflation and the prospect of rising debt and depreciating currencies,” it said in an email.
Additionally, Bitcoin short-seller liquidations have been a big part of the recent rally.
Covering the period that began just before last Thursday’s inflation report, $893 million worth of short Bitcoin positions have been liquidated over the past seven days, according to crypto derivatives aggregator CoinGlass. $455 million worth of short positions were forced out of the market during that period as a net liquidation of
Bitcoin also “astronomically” crossed the 50-day moving average, a key technical level that suggests the asset has reached “extreme overbought levels,” Bespoke Investment Group said last Friday. pointed out to
For nearly every other asset, an overbought measurement usually means that purchasing power is nearly exhausted. Bitcoin’s rise is often driven by momentum. Jake Gordon, a research analyst at Bespoke Investment Group, told his Yahoo Finance about Bitcoin’s recent rally: “We have seen [trading] Volume is starting to recover. ”
However, Safai also noted that there is still an “undercurrent of anxiety” in the cryptocurrency market, with investors worried that FTX may not be the last shoe.
A letter to shareholders of the Digital Currency Group (DCG) on Wednesday, seen by Yahoo Finance, shows the major crypto portfolio companies plan to cut their dividends.
Some shareholders aren’t surprised DCG is looking to raise money for its subsidiary Genesis, which suspended loan withdrawals on Nov. 16.
“Perhaps instead of suspending dividends, DCG should first consider suspending executive chefs and other perks at its sprawling headquarters,” a DCG shareholder told Yahoo Finance. He admitted that he was surprised the suspension wasn’t announced sooner, given the circumstances.
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