The warning from Bitcoin’s fizzling rise

If past is any indication, investors should take note of the warning contained in Bitcoin’s two-month rally.

According to data gathered by Bloomberg, the February increase in the biggest digital token has diminished to just 2% and is nothing compared to the 39% increase in January.

Since the pandemic low in 2020, there have been five occasions where Bitcoin rose over two consecutive months with a smaller gain in the second stanza. In four of those instances, it fell back in the third month, recording an average loss of 5.8%. The coin was only subject to an exception from February 2021 to August 2021, when it was experiencing a strong bull run.

The possibility of higher interest rates for a longer period of time to tame inflation caused Bitcoin to finish in the red on Sunday for the third consecutive week. The industry is also being squeezed by a regulatory crackdown in the US following the failure of the FTX exchange.

According to Noelle Acheson, editor of the “Crypto Is Macro Now” newsletter, the market’s recent correction is not unexpected given the dollar’s strength and bets on increasing borrowing costs.

As of 7:43 a.m. on Monday in London, the price of one bitcoin decreased by about 0.6% to about $23,430. Ether, in second place, dropped 0.4% to $1,636.

The Solana blockchain’s native cryptocurrency, SOL, underperformed with a decline of as much as 2.5%. Over the weekend, Solana experienced an hours-long slowdown. This was the most recent in a string of outages, technological difficulties, and processing issues that have dogged the network since its launch in 2020.