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Traders grow wary of ‘unloved’ Bitcoin rally

Thin trading underpins 70% rise in the price of flagship cryptocurrency, The Bitcoin rally.

Cryptocurrency trading activity has dwindled even as bitcoin enjoys its longest winning streak in more than two years,

in a sign that many investors are increasingly reluctant to buy into the rebound after a string of collapses and scandals in 2022.

Investors have shrugged off lawsuits from US regulators against companies such as Binance, the industry’s largest exchange,

and the collapsed stablecoin operator Terraform Labs, as authorities have sought to clamp down on activity they see as illegal.

However, the price of bitcoin has since been stuck in a rut for more than a month, trading in a narrow range around $28,000.

That pause has been accompanied by thinning volumes, with small trades increasingly able to move market prices.

regulatory scrutiny is sidelining a lot of new money that might otherwise enter the space.

While bitcoin’s recent performance is great on the face of it, many in crypto are calling this year an unloved rally” said Charles Storry, head of growth at Phuture, a crypto index provider.

“Sentiment hasn’t changed, and regulatory scrutiny is sidelining a lot of new money that might otherwise enter the space.

Price movements don’t mean much if the industry isn’t making meaningful progress to regain trust and attract new investors,” he added.

A bruising 2022 has left investors nursing losses or funds trapped in limbo as failed cryptocurrency lenders and exchanges go through bankruptcy proceedings in the courts.

Crypto enthusiasts also argued confidence has been renewed by the weakness in the global banking sector,

and the vast outflow of deposits from banks such as the US’s Silicon Valley Bank and Silvergate, and Credit Suisse in Switzerland.

“That rally we experienced after the banking crisis earlier this year seemed to be directly related to a flight for safety and self-custody of funds away from the dollar”

said Edmond Goh, head of trading at crypto broker B2C2.

The uncertainty, along with the crisis in the US regional banking industry, has underscored for many that the market is still working through its many issues.

“There still isn’t a lot of organic momentum behind cryptocurrencies,” said Safai.

“The headline events that propel cryptocurrency prices past sticking points . . are few and far between.”

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