Ether and other altcoins were largely in negative territory. Yet a markets analyst struck an optimistic note about cryptos’ medium- and long-term prospects.
Bitcoin was down but still holding firmly above $26,000.
Photo by Chip Vincent on Unsplash
Posted September 26, 2023 at 4:25 pm EST.
For yet another day, interest rate worries bedeviled major cryptos, which chugged along largely in negative territory.
Bitcoin was recently trading at $26,250, down the better part of a percentage point over the past 24 hours. Except for a couple of blips, the largest cryptocurrency by market capitalization has held its perch above $26,000 for more than two weeks. Analysts believe it will remain near this level for the foreseeable future along with other risk-on assets, bogged down by restrictive, central bank monetary policy that many investors see as an overstep increasing the chances of recession.
“There are certainly attractive, risk-free investments elsewhere that are drawing money away from Bitcoin,” said Richard Mico, the U.S. CEO of Banxa, a crypto payment-and-compliance infrastructure provider, wrote in an email to Unchained, adding that “for the short-term, we’ll experience chop.”
Yet Mico also struck an upbeat note about crypto markets, saying that he didn’t expect the fed to raise rates, despite its “posturing of late,” and noting not only the likely approval of a spot BTC exchange traded fund over the next six months but the Fed’s continued injection of liquidity in the market “on the sly.”
“While the macro situation is difficult, ultimately there are catalysts in the medium term,” Mico wrote. “The setup for the medium and longer term is looking more and more optimistic.”
Ether was recently changing hands at $1,584, down 0.3% from Monday, same time. TON, the native token of the Toncoin blockchain, ADA and SOL, the native cryptos of smart contracts platforms Cardano and Solana, and popular memecoins DOGE and SHIB were all in the red, albeit not deeply so.
Cryptos fared somewhat better than stocks, with the tech-focused Nasdaq, the S&P 500, which has a hefty technology component, and the Dow Jones Industrial Average (DJIA) all down more than a percentage point. After a slew of daily declines amid this month’s investor rate angst, the Nasdaq and S&P have slumped to their lowest levels since the spring.
The Conference Board’s monthly Consumer Confidence Index, a widely regarded, monthly measure of economic sentiment, tumbled in September with the short-term outlook dropping to 73.7, down from August’s 83.3. Levels below 80 historically signal a recession within the next year.
“Consumer confidence fell again in September 2023, marking two consecutive months of decline,” said Dana Peterson, Chief Economist at The Conference Board, in a statement noting particular consumer concerns about groceries and energy, in a statement.
In an email, Craig Erlam, market analyst for foreign exchange market maker Oanda, wrote that despite central banks declarations to end their roughly 18-month diet of steep rate hikes, “investors are apprehensive, even a little fearful.”
