Is the bear market for cryptocurrencies over? Here’s what to watch.

Bitcoin and Ether are on track for their best month since last October, prompting some investors to wonder if the cryptocurrency bear market is over.

The cryptocurrency no. 1 BTCUSD,
-0.96%
It hit a high of $ 24,412 on Friday, the highest level since June 13, according to data from CoinDesk. Bitcoin has risen more than 19% so far this month, while Ether ETHUSD,
-3.41%
jumped by more than 50%.

However, bitcoin and ether are respectively trading down 65% from last year’s highs.

Despite recent gains, “market data continues to show traders are positioned conservatively,” NYDIG analysts wrote in a Friday statement.

Open interest in bitcoin futures and options, which measures the total of outstanding derivative contracts, differs from recent lows but remains well below all-time highs, analysts at NYDIG noted. Funding rates for perpetual swaps also remain mostly neutral, according to Coinglass data. A positive funding rate is generally considered to be bullish because investors are willing to pay for a long time, while a negative funding rate is generally a bearish sign.

“The fact that funding rates are still low on an absolute basis indicates a lack of desire among traders to accept directional bets, although they appear to be trending upward,” the analysts wrote.

From a technical standpoint, it is important to see if, by the end of this week, bitcoin could be trading above its 200-week moving average, which currently stands at $ 22,800. Observed Will Clemente, an analyst at Blockware Solutions.

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Overall, the macroeconomic environment continues to play the most important role, analysts note. “Unsurprisingly, the entire year will be dominated by the Fed and what it does,” said Ben McMillan, founder and chief investment officer of IDX Digital Assets.

The stock and cryptocurrency market rose this week after the Federal Reserve hiked its benchmark interest rate by 75 basis points and Fed Chairman Jerome Powell said that while another rate hike of the same magnitude in September is been possible, the decision will depend on the upcoming data. . Some traders have predicted that the Fed will slow the pace of rate hikes, while others believe such expectations may be premature.

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