Bitcoin Bitcoin
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It has not performed as well as U.S. stocks and other macro assets over the past few weeks since the widespread debt cleanup in early August.
On Monday, August 4, cryptocurrency markets lost about $367 billion in value in 24 hours. The selloff coincided with a broad-based decline in stocks, one of the worst days for risk assets since the “Black Monday” crash of 1987.
According to Friday’s Coinbase weekly report, Bitcoin has underperformed the index since the early August deleverage incident.
“On a risk-adjusted basis, the Bitcoin price is currently 0.50 standard deviations below its three-month average, and when compared to the S&P 500, the index level is actually 1.41 standard deviations above its three-month average,” Coinbase analysts David Duong and David Han said.
Lack of narrative catalyst to drive Bitcoin price
Analysts added that Bitcoin’s recent price action has been erratic and trading within a relatively narrow range, which is consistent with concerns that there is a lack of a new, distinctive narrative driving the asset’s price action.
“Bitcoin prices have struggled to fully recover since early August. The lack of a narrative and the fact that September is a seasonally difficult month for cryptocurrencies are keeping traders on a wait-and-see basis,” Duong and Han added.
Analysts said this was mainly due to reduced ETF (exchange traded fund) flows, Bitcoin-related oversupply, and the recovery of the multilateral US dollar index, which could negatively impact the cryptocurrency’s performance.
“Nevertheless, Ether continues to underperform Bitcoin, with ETH/BTC hitting its lowest level this year amid spot Ethereum ETF outflows,” they added.
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