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Bitcoin and other cryptocurrencies traded higher on Tuesday, marking one of the longest-running losses since 2018.
Bitcoin was worth about $ 42,900, up 2.8 percent in the last 24 hours. Ether, the second-largest token, was at $ 3,240, up 5.9%. Other major coins, including Solana, Cardano, Polkadot, Polygon, Avalanche, and Dogecoin, were collected.
Whether or not the rally took place depends on both macro and technical issues.
The macroeconomic landscape is getting stronger as the Federal Reserve and other central banks prepare markets for higher interest rates this year. The federation has indicated it will raise prices three times this year and begin to reduce its $ 9 trillion balance sheet.
That overflows and poses a long-term obstacle to speculative assets such as cryptos. As the federation strengthens its supply chain and increases bond yields, it may flow into asset assets, including small capital cryptos.
The technical side of crypto is also boring. Bitcoin traded lower for $ 40,000 on Monday, while Ether fell below $ 3,000.
Although both cryptos are back a bit, some technical analysts are still not surprised. “Medium progress is slowing down,” says Kathy Stoketon, founder of Crypto Research. Fairlid Strategies.
“Bitcoin and other cryptos are still modes, in terms of their long-term growth,” she said in an interview. “Excessive conditions have returned but have not yet improved. Until we see that progress, we will not feel better about increasing exposure.
Bitcoin’s next major support level is $ 37,400. If it goes down that way, buyers can come in, says Stoketon. On the upside, the resistance is at $ 49,400 — a 50-day moving average — indicating that higher Bitcoin should be violated for further activity.
While the technical and macro reasons may not seem good, some analysts are looking at the value of beaten crypto stocks.
JP Morgan analyst Kenneth Wortington reiterates support for crypto exchange
Coinbase Global
(Ticker: COIN) In a recent note, for example, “It still buys.”
“The issues with the use of cryptocurrencies will continue to grow and will be addressed with new projects and more and more usage issues,” he wrote. “By combining these projects with tokens and making Coinbase a major exchange for buying and selling, we see Coinbase as a leading direct user of crypto market growth.”
Bitcoin, which trades on the network and receives bitcoin, has also been hit by a hammer, falling more than 40% since last November.
But the major miners have opened up capital and increased their capacity to capture more network “hash rate” or total computing power. More hashing potential miners are theoretically holding more than Bitcoins as a fee for approving trading restrictions on the network.
“Even at $ 42,000, you can generate 85% of your total profit,” said DAF Davidson analyst analyst Christopher Brendler. “There are concerns about their ability to grow and grow capital, but now they have enough money in their accounts, so the market is getting stronger here.”
Brendler Core Scientific estimates that one of the lowest costs for mining is around $ 5,000 per coin. Core plans to merge with the public
Power and digital infrastructure acquisition
(XPDI), a special purpose acquisition company. The stock sells for about $ 10, which is usually the floor for SPACs.
Riot Blockchain
(RIOT) Mining costs $ 13,000, estimates Brendler, while
Marathon Digital Holdings
MARA is around $ 7,000 to $ 8,000. He evaluated all three stocks as purchase.
“These companies are the cheapest stocks for Ebitida in terms of revenue and corporate value, as their growth is funded and financed by 2022 and they have a lot of bitcoin in their accounts,” he said, citing earlier earnings. Interest, taxes, terminations and compensation.
Riot trading is 10 times higher than the estimated 2022 adjusted earnings per share, Brendler Notes, Core 8.2 times and Marathon 6.4 times. Those estimates suggest that the market is either too skeptical or too profitable for miners to reach.
Still, for investors who believe in Bitcoin’s long-term prospects, miners seem to be a fascinating in-depth game.
Write to Daren Fonda at dare.fonda@barrons.com
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