BTC prices stagnated around the $6,500 level, a price which is seen as key to having a viable mining economy, with large mining farms being able to support themselves with block rewards and afford new mining rigs.
Lowered liquidity and a change in the trading profile of Bitcoin led to the current stagnation. At the same time, the stock markets are experiencing a series of factors weighing down prices. As for the NASDAQ index, it is heavily dependent on the performance of a handful of tech companies - Facebook, Amazon, Netflix, Google, known as FANG.
“From 8,000 to nearly 7,150 in one month? Wall Street is looking sort of unreliable. Facebook likely won’t reach its previous highs any time soon and even Amazon took a hit. The NASDAQ is tethered to FANG, just about as much as digital assets are tethered to Bitcoin, and that’s a problem for the future of stock markets. They are too tech top heavy,” explained Spencer.
Part of the reason for the inherent risk in stock indexes is that they contain overhyped stocks with unrealistic valuations, especially Netflix and Tesla.
The stock markets also are at the peak after years of climbing, having to defend the trend in the new conditions of potentially higher Fed interest rates. The Dow Jones index has also had days of unexplained drops.
In the meantime, BTC trading has been subdued, with volumes around the equivalent of $3.6 million, made up of trading in dollars, as well as stablecoins. The diminished retail interest is also affecting the performance of BTC.
However, the current situation of low-volatility crypto assets, which also extends to altcoins, is also a sign of waning enthusiasm and lower speculative activity.
Article comments