Bitcoin rallied past the $110,500 level on Monday. The largest crypto is down nearly 2% as bullish momentum slowly fades. Interestingly, US crypto-linked stocks rose alongside Bitcoin and are currently consolidating alongside the largest crypto.
Crypto stocks posted double-digit gains in the past month even as Bitcoin (BTC) yielded a modest increase of under 4%. In this deep dive we compare the performance of crypto stocks, Bitcoin and altcoins and examine the profitability of the sector in a traders’ portfolio.
US crypto stocks vs. Bitcoin performance
Crypto-linked stocks in the US kicked off the week with a rally alongside Bitcoin. BTC tested resistance above the $110,500 level and started consolidating, crypto-linked mining stocks and stocks of major crypto firms wiped their recent gains on Tuesday.
More corporates adopted Saylor’s strategy of adding Bitcoin to their treasury, and Circle made a stellar IPO debut on Nasdaq last week. These developments are key catalysts driving Bitcoin’s gains and the rise in US crypto stocks.
Circle Internet Group (CRCL), one of the largest stablecoin issuers, wiped out nearly 8% on the day, down to $106.62. The stock erased its Monday days nearly entirely.
Core Scientific Inc. (CORZ), CleanSpark Inc. (CLSK), and MARA Holdings Inc. (MARA), key crypto mining stocks, observed small changes in their price on Tuesday. CORZ is down 0.12%, CLSK is up 0.10%, and MARA gained 0.25% on the day.
Riot Platforms Inc. (RIOT) gained 0.60% on Tuesday.
Bitcoin slipped closer to its support at $108,000 on the day, as crypto stocks continued their consolidation. Bitcoin’s correlation to the S&P 500 has recently dropped, which supports a thesis of equity investors choosing to gain exposure to crypto through stocks, instead of direct access to tokens that entails the risk of custody and security.
The decline in crypto stocks like CRCL, Coinbase (COIN), KULR Technology Group Inc. (KULR), and Robinhood Markets Inc. (HOOD) presents an opportunity for sidelined buyers to consider adding crypto stocks to their portfolio, and balance against their crypto token holdings this cycle.
If Bitcoin’s correlation with S&P 500 weakens further, it is likely that crypto stocks outperform BTC and altcoin holdings this cycle.
Nasdaq newcomer takes a hit this week
Circle’s stock is facing a sharp sell-off after its rally following its debut in the US. After its peak on Monday, CRCL observed a steep decline throughout the early trading hours on Tuesday. CRCL rallied pre-market and the all-time performance remains above 50% for the stock.
Tuesday’s intraday chart for CRCL shows a steady downward trend on the day, it remains to be seen whether CRCL will make up for its losses.
US crypto stocks are attracting inflows and interest
While Bitcoin investment funds struggle with institutional capital inflows according to the latest Digital Asset Flows Report from CoinShares, the combined market value of publicly listed crypto companies has surpassed $300 billion.
The inflow to firms behind US crypto stocks has observed an increase in inflows amidst Bitcoin’s consolidation in the past few weeks. The demand for exchange stocks, Bitcoin mining stocks, and stablecoin issuer Circle’s CRCL keeps rising.
Bitcoin’s rising hashrate has increased the competition between miners, and regulations like the GENIUS Act support a pro-crypto environment for further growth in crypto stocks.
Analysts at 10xResearch believe that the rise in Robinhood’s crypto revenue and Coinbase’s stock being undervalued at the time of writing is a sign of a structural shift in the market. Retail investors eyeing a piece of Bitcoin are likely attracted to crypto stocks, in light of higher regulatory clarity on holding and taxation of cryptocurrencies.
Bitcoin price analysis
Bitcoin price is less than 2% away from its all-time high of $111,980. A re-test of the previous all-time high and a daily candlestick close above this level could push BTC into price discovery. The BTC/USDT price chart shows $122,172, the 127.2% Fibonacci retracement level of the rally from the April low of $74,500 to the all-time high could be the next target for Bitcoin.
Technical indicators, RSI and MACD support further gains in Bitcoin. RSI reads 62, above average but under the overvalued level at 70. MACD flashes green histogram bars above the neutral level, meaning that the underlying momentum in Bitcoin price trend is positive.
Bitcoin is 11% away from the 127.2% Fibonacci retracement level and BTC could find support at $106,488, the lower boundary of the FVG on the daily price chart.
Ruslan Lienkha, Chief of Markets at YouHodler told Crypto.news in a written note that there is a strong possibility that Bitcoin hits a new all-time high.
Lienkha said, “…As the price currently stands just a few percentage points below its previous peak. Broadly speaking, financial markets remain optimistic. The S&P 500, for example, is trading approximately 3% below its all-time high. However, the risk of a reversal remains, particularly if upcoming economic data disappoints.
All eyes are now on tomorrow’s U.S. inflation report. While markets are pricing in a moderate uptick, a higher-than-expected reading could trigger increased volatility across risk assets, including cryptocurrencies.”
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
