The exciting rally in early 2023 ended in February as the cryptocurrency weakened in the second month of the year.
In February, the market's second largest cryptocurrency ether (ETH-USD) outperformed its largest partner bitcoin (BTC-USD), gaining 0.4% against 1.6% for the month. Bitcoin posted its best start to the year since 2013, rising nearly 40% in January.
Christopher Newhouse, cryptocurrency options trader at GSR, said February's bitcoin moves were "more boring for directional trading than January."
As Newhouse explained, crypto derivatives trading volume was high in February, but volatility decreased during the month. Bitcoin is still the most popular cryptocurrency for traders, but over the past few weeks, the stakes have "mixed or turned to small moves at the end of the month."
Over the same period, major US indexes fell, with the S&P 500 ( ^GSPC ) down 2.5% for the month.
“Short-term interest in Bitcoin is minimal,” Michael Safai, co-founder and partner at cryptocurrency trading firm Dexterity Capital, told Yahoo Finance. Safai pointed to US regulatory action over the last few weeks as another reason why investors should be more careful about cryptocurrencies.
In its annual report Monday afternoon, Robinhood (HOOD) shared its latest regulatory checks and warned investors that the SEC is seeking calls in December to find out how the company is registered and regulated.
"There is still optimism that things will start to make sense in the coming months.
Since the beginning of 2023, Bitcoin watchers have focused on the possibility of the Bitcoin price rising above $25,000. He appeared on stage for a brief period between February 19-20. Bitcoin has fallen more than 6% and is now changing hands at close to $23,200.
“Bitcoin feels comfortable trading, and could be that way for a while,” said Edward Moya, senior analyst at Onda.
Based on historical data compiled by Yahoo Finance, bitcoin has turned positive in March for three of the last nine years. On average, the coin loses about 5.3%.
Meanwhile, demand for Bitcoin (ETH-BTC) has grown more than Ether over the past few weeks, serving as an indicator of overall risk appetite in the cryptocurrency market. .
Ethereum is getting more attention as it approaches its next protocol update in early April.
"Overall, Ethereum has underperformed the last six weeks," Fundstrat strategists said in a note on Monday. "Looks like that's about to change."
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