Bitcoin Prices Rise to Start March. How the Month Could End.

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Bitcoin
and other cryptocurrencies were rising on Wednesday, starting March on the right foot after a roaring rally to start 2023 stagnated somewhat in February. History says the weeks ahead might be even harder.

The price of Bitcoin has risen 1.5% over the past 24 hours to $23,750. The largest digital asset is still up some 40% so far this year, but has largely failed to consolidate above the $24,000 level, to say nothing of above $25,000—the peak of a recent rally that also marks the highest point since last summer. Bitcoin rose from around $16,500 at the end of December to above $23,000 by the end of January, but has failed to make the same scale of progress in the month since.

“March is considered an unpromising month of the year for the top cryptocurrency, having fallen in eight of the last 12 years with an average decline of about 15%,” said Alex Kuptsikevich, an analyst at broker FxPro. Kuptsikevich said that when Bitcoin has gained in March it has, on average, climbed 16%.

While Bitcoin’s surge to begin the year marked a vast outperformance of the

Dow Jones Industrial Average
and

S&P 500
—with the correlation between cryptos and the stock market fading—investors should keep looking to equities as a guide. While factors specific to crypto, like regulatory scrutiny and institutional adoption, are important, the macro picture and sentiment for riskier assets at large remain influential.

Investors are concerned about the state of inflation in the U.S., which pushed the Federal Reserve to raise interest rates rapidly last year. Higher rates dampen demand for riskier bets like stocks and cryptos, and recent signs that inflation could be persistent have raised the prospect that rates will stay higher for longer.

Nevertheless, after such a strong start to 2023, crypto traders are still betting on more gains. Analysts at the crypto exchange Bitfinex said in a Monday note that moves in the market indicate “sentiment across options desks is trending bullish again after a week of remaining neutral.”

The technical outlook also looks strong beyond the crypto derivatives market.

“The strong growth momentum in January and the renewal of local highs in February suggest that the bulls prevail,” said FxPro’s Kuptsikevich. “At the same time, the technical picture on the weekly timeframe suggests that only a consolidation above $25,000 will strengthen the bullish view of the market.”

Beyond Bitcoin,

Ether
—the second-largest crypto—advanced 1.5% to $1,650. Smaller cryptos, or altcoins, were more mixed, with

Cardano
just below flat but

Polygon
2% higher. Memecoins were also muted, with

Dogecoin
barely above flat and

Shiba Inu
—which has appeared at risk of a correction—down 0.5%.

Write to Jack Denton at jack.denton@barrons.com