Bitcoin Rebound Stalls. Why Cryptos Are In a Perilous Position. — Barrons.com
By George GloverBitcoin rebounded over the weekend — but the comeback following last week's selloff already looks like being short-lived, judging by early Monday trading.The cryptocurrency was flat at $86,012 over the past 24 hours, according to data from CoinDesk. It's trading 32% off the record high of $126,273 that it hit in early October.Other tokens were also struggling for direction. Ethereum slipped 0.2%, Solana fell 0.6%, but XRP climbed 1.1% over the past 24 hours, per the Kraken crypto exchange.The price of Bitcoin rose by nearly $4,000 over the weekend, easing some fears following last week's crypto crash.But it still appears to have lost its correlation with other risk assets — futures tracking the tech-heavy Nasdaq 100 were up as much as 1% early Monday, before paring back some gains.One reason that Bitcoin is struggling despite a broader market rebound could be that many investors bought in at around $90,000. With it now trading below that, they may be hesitant to dip into their pockets again, especially if they borrowed money to buy it and are now facing margin calls.The next few days could well be crucial for cryptos, with a slew of delayed economic data set to be published ahead of Thanksgiving. If that strengthens the case for the Federal Reserve to cut interest rates in December, then that could boost Bitcoin and its peers — when borrowing costs are lower, they become more appealing relative to interest-bearing assets like bonds and savings accounts.But if the odds shift in favor of the Fed keeping rates unchanged, that could spark a further crypto selloff. A key level to watch for Bitcoin is $80,000, according to Interactive Investor's head of investment Victoria Scholar."A break below this technical support level could provide further fuel to the crypto bears, adding to downside pressure," she wrote in a research note on Monday."The speculative asset is highly sensitive to risk sentiment and with growing fears of a market crash or correction amid the lofty valuations seen within tech and AI, Bitcoin has found itself in the firing line with many investors liquidating their holdings," Scholar added.Write to George Glover at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.