coindesk.com
Bitcoin (BTC) and ether (ETH) have lost their momentum over the past seven days, with each posting 6% declines as investors worried about inflation and continued monetary hawkishness.
On Friday the two largest cryptocurrencies by market capitalization plunged after the U.S. Commerce Department reported that the personal consumption expenditures (PCE) price index climbed by an unexpectedly robust 5.4% in January, offering the latest evidence that inflation remained problematic. The PCE price index is the U.S. Federal Reserve’s favored inflation gauge.
BTC dipped near $23,000 at one point Friday, its lowest level in nine days. ETH was recently off about 2.5% over the past 24 hours.
Weekly rankings
On a relative basis, BTC’s seven-day performance was 22nd among crypto assets with a greater than $1 billion market capitalization. Ether finished 23rd among the group. Still, the two assets remain up 39% and 32% year to date amid a moderately, more upbeat economic environment than in 2022.
Topping the list was tezos (XTZ), the token of the self-amending protocol that facilitates the creation of smart contracts. Tezos posted an 8% gain over the most recent seven days, and is up 74% year to date.
At the bottom was fantom (FTM), the token of the Fantom smart contract platform, that posted a 17% loss.
While falling below the $1 billion market cap threshold, the token (OP) of the Optimism network rose approximately 20% this week, following Coinbase Global’s (COIN) announcement of its new layer 2 network launch. The network will be built using Optimism, which will also serve as a core platform developer.
Technically, momentum for both BTC and ETH declined this week because their Relative Strength Index (RSI) readings fell near the neutral level of 50. Bitcoin’s price has declined for four consecutive days on above-average volume. ETH’s price has fallen in five of the most recent seven days.
BTC’s 50-day moving average remains above its 200-day moving average, a so-called golden cross that usually yields positive results but has yet to do so in this most recent instance. BTC’s price is down 6% since its occurrence on Feb. 18.
The pricing relationship between BTC and ETH remains tight, as their correlation coefficient sits at 0.94.
Bitcoin’s prior inverse correlation with the dollar index (DXY) has shifted this week to positive, with a correlation coefficient of 0.50.
On a macroeconomic basis, little occurred this week to shake the probabilities of continued interest rate hikes by the U.S. central bank's Federal Open Market Committee (FOMC). While inflation has moderated, the persistently tight labor market remains concerning for Federal Reserve governors.
Week-to-date performance among the CoinDesk CMI sectors shows the Digitization sector up slightly to lead the rankings, with all other CMI sectors trading negatively. Members of the CoinDesk Digitization index include Braintrust (BTRST), Civic (CVC), Ethereum Name Service (ENS) and Galxe (GAL).