Cryptocurrency industry-related exchange traded funds surged Monday after bitcoin rallied for a fourth consecutive day and broke back above $22,000 in a month.
Among the best performing non-leveraged ETFs of Monday, the Viridi Cleaner Energy Crypto-Mining & Semiconductor ETF (RIGZ) was up 9.3%, the Global X Blockchain ETF (BKCH) increased 12.6%, the VanEck Vectors Digital Transformation ETF (DAPP) advanced 10.3%, the Bitwise Crypto Industry Innovators ETF (BITQ) rose 9.8%, and the Amplify Transformational Data Sharing ETF (BLOK) gained 4.9%.
The bounce in crypto businesses was also supported by a broader risk-on rally across the equity markets. Additionally, the relief recovery on Monday comes after the steep sell-off in everything cryptocurrency related, with bitcoin falling off almost 70% from its all-time high back in November.
“The worst of market contagion has likely run its course, with the majority of forced selling behind us,” David Moreno, research analyst at CryptoCompare, wrote in a research note, according to CNBC.
However, analysts still warned that the market won’t experience any significant move higher in the near term.
“Given the severely negative performance in Q2, it is unsurprising that a ‘relief’ bounce has occurred. We believe the market will continue range-bound over the coming months,” Moreno added.
Crypto stocks are highly correlated to the prices of cryptocurrencies, like Bitcoin and Ethereum. Over the weekend and through Monday morning, bitcoin prices surged to $22,100 from $20,800.
Bank of America on Friday argued that it was seeing “continued signs of fading sell pressure,” in crypto, CoinDesk reports.
“Over the last two weeks, digital assets’ market value fell 4% vs. 30% over the prior four weeks,” Bank of America’s Alkesh Shah and team said in the note.
“When the market starts reacting positively to negative news, this is a signal that a local bottom could be in for now, as fear may have caused the news to be priced in,” GlobalBlock’s Marcus Sotiriou said on Monday morning, noting continued Fed hawkishness in the face of ugly inflation headlines continues.
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