If you’re wondering, “Is Bitcoin a good investment?” Here’s some news for you.
Bitcoin and other cryptocurrencies were down on Wednesday, continuing to tumble from last month’s highs amid a period of sluggish trading in digital assets that might indicate further difficulties for cryptos.
Bitcoin has dropped 2% in the last 24 hours to $26,750, dropping to the bottom of a two-week-long trading range between $26,500 and $27,500 and marking one of the currency’s narrowest trading ranges in years. While Bitcoin is still up by about two-thirds in 2023, last month’s peak above $30,000 has stayed out of reach as the largest digital asset has languished under record-low volatility.
“Bitcoin is steadying as investors battle debt-ceiling uncertainty and start to become more pessimistic about stocks,” said Edward Moya, an analyst at broker Oanda.
Indeed, the macroeconomic environment has been challenging for digital assets, with investors’ risk sentiment deteriorating amid US debt ceiling discussions and the threat of further Fed rate rises. Talks to avoid a US default will continue to be a significant trigger for cryptos in the coming days.
According to market observers, Bitcoin appears to be losing its way following a spectacular gain to begin the year, and it remains vulnerable to a further correction as it continues to trend lower and test critical levels to the downside.
“You can look at Bitcoin in two ways right now. It’s either chilling on the narrow ledge that is $27,000 waiting to resume its climb, or it’s clinging on by its fingertips before the inevitable fall to the mid-20s or even lower,” said Antoni Trenchev, co-founder and managing partner at crypto lender Nexo.
Bitcoin has also been underperforming the stock market in recent days, behind the Dow Jones Industrial Average and the S&P 500, despite the fact that issues such as the debt ceiling have a more direct impact on stocks. This is a worrisome omen. So, if you’re wondering, “Is Bitcoin a good investment?” It is when you know when to invest in it.
Bitcoin’s recent underperformance against equities is cause for concern, according to Trenchev. Typically, Bitcoin outperforms when there’s a breakdown in the relationship between the two assets, but recent trends have indicated otherwise. This speaks volumes about the future of Bitcoin, and it seems to be carrying a heavy weight.
Additionally, Ether dropped by 2% to $1,820. Smaller cryptos, including Cardano and Polygon, also experienced downturns, while popular meme coins like Dogecoin and Shiba Inu were also in the red.