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Bitcoin surged past the $110,500 mark earlier this week, but bullish momentum has started to fade, with the cryptocurrency slipping by nearly 2%. Despite this, U.S. crypto-linked stocks have rallied alongside Bitcoin, showing strong performance over the past month. While Bitcoin posted a modest 4% gain, several crypto stocks delivered double-digit returns, highlighting their growing appeal to investors.

US Crypto Stocks vs. Bitcoin Performance

Crypto-related stocks in the U.S. kicked off the week with strong gains, mirroring Bitcoin’s move above the $110,500 resistance level. However, by Tuesday, many of these stocks started consolidating, with some erasing earlier gains. Stocks of crypto-mining firms and other major crypto companies showed mixed results during the trading day.

For example, Circle Internet Group (CRCL), a leading stablecoin issuer, saw substantial volatility. After a strong IPO debut on Nasdaq last week, CRCL dropped nearly 8%, closing at $106.62 on Tuesday. Similarly, other crypto mining stocks like Core Scientific Inc. (CORZ), CleanSpark Inc. (CLSK), and MARA Holdings Inc. (MARA) showed only minor price changes, reflecting a period of consolidation in the sector.

Meanwhile, Riot Platforms Inc. (RIOT) posted a modest gain of 0.60% on Tuesday, indicating some resilience in the market. Bitcoin, on the other hand, slipped closer to its $108,000 support level, as its correlation with the S&P 500 continued to decline. This weakening correlation suggests that equity investors are increasingly favoring exposure to crypto via stocks rather than direct token holdings, which carry custody and security risks.

Nasdaq Newcomer Takes a Hit This Week

Circle’s stock experienced a sharp decline after its initial rally upon debuting on the Nasdaq. After reaching a peak on Monday, CRCL saw a steady downtrend throughout Tuesday’s trading session. Despite the decline, the stock’s overall performance remains over 50% higher than its initial offering price.

Investors are closely monitoring CRCL’s performance to gauge whether it can recover its losses or continue its downward trajectory. This volatility underscores the high-risk, high-reward nature of investing in newly listed crypto stocks.

US Crypto Stocks Are Attracting Inflows and Interest

While Bitcoin-focused investment funds have struggled to attract institutional capital recently, U.S. crypto-linked stocks have seen an increase in inflows. The combined market capitalization of publicly traded crypto companies has now surpassed $300 billion, reflecting growing investor interest in this sector.

Several factors are driving this trend, including the rising demand for exchange stocks, Bitcoin mining stocks, and stablecoin issuers like Circle. Bitcoin’s increasing hashrate has also intensified competition among miners, while pro-crypto regulations in the U.S. continue to create a favorable environment for growth.

According to analysts, stocks such as Robinhood (HOOD) and Coinbase (COIN) are attracting attention from retail investors due to their perceived undervaluation and rising crypto revenues. For investors looking to gain exposure to the crypto market without directly purchasing tokens, crypto stocks offer a compelling alternative, especially given the regulatory clarity around their holdings and taxation.

Bitcoin Price Analysis

Bitcoin is currently trading less than 2% below its all-time high of $111,980. A breakout above this level could push the cryptocurrency into uncharted territory, with the next potential target at $122,172, based on the 127.2% Fibonacci retracement level of its rally from April’s low of $74,500.

Technical indicators support the possibility of further gains. The Relative Strength Index (RSI) is currently at 62, suggesting bullish sentiment without being overbought. Meanwhile, the Moving Average Convergence Divergence (MACD) shows a positive trend, with green histogram bars above the neutral level, indicating strong underlying momentum.

Bitcoin could find support near $106,488, the lower boundary of the Fair Value Gap (FVG) on the daily chart. However, a failure to hold this level may lead to increased selling pressure. Market participants are also keeping an eye on macroeconomic data, such as the upcoming U.S. inflation report, which could introduce volatility across risk assets, including cryptocurrencies.

Ruslan Lienkha, Chief of Markets at YouHodler, stated: “There is a strong possibility that Bitcoin hits a new all-time high as it stands just a few percentage points below its previous peak. However, the risk of a reversal remains, particularly if upcoming economic data disappoints.”

With financial markets remaining optimistic, Bitcoin’s trajectory will likely depend on broader economic trends and investor sentiment in the coming weeks. Traders should remain cautious, as unexpected macroeconomic developments could significantly impact price movements.

Disclosure: This article is for educational purposes only and does not constitute investment advice. Always conduct thorough research before making financial decisions.

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