Bitcoin’s Fizzle in Two Months of Rally Is a Warning for Investors

February’s jump of around 2% in the largest digital token pales in comparison to January’s 39% jump, data compiled by Bloomberg show.

Since the low of the pandemic in 2020, there have been five such cases when bitcoin climbed for two straight months but saw little gains in the second leg. It retreated in the third month in those four cases, with an average loss of 5.8%. The only exception was the period until February 2021, when the coin was in the midst of a mighty bull run.

Bitcoin ended in the red on Sunday for the third week in four, hurt by the prospect of higher-long-term interest rates to reduce inflation. A regulatory clampdown in the US following the collapse of the FTX exchange is also weakening the sector.

“It’s not surprising that the market saw some correction last week,” wrote Noel Acheson, author of the “Crypto Is Macro Now” newsletter, who cited the dollar’s strength amid bets on higher borrowing costs.

Bitcoin was down about 0.6% to trade at around $23,430 as of 7:43 a.m. ET in London on Monday. Second-placed ether fell 0.4% to $1,636.

SOL, the native token of the Solana blockchain, performed poorly, down as much as 2.5%. Solana suffered an hour-long outage over the weekend – the latest in a series of outages, technical issues and processing problems that have plagued the network since its launch in 2020.