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https://content.fortune.com/wp-content/uploads/2023/02/Bitcoin-122.jpg?w=2048Over the course of a three-day weekend marked by skittishness over the Fed’s next rate hike, Bitcoin broke above the $25,000 level four times before promptly retreating on each occasion, according to data from CoinMarketCap.
After surpassing that benchmark for the first time in eight months on Feb. 17, Bitcoin did it again on Sunday, twice on Monday, and again around 3:30 a.m. ET on Monday.
As of Tuesday morning, the cryptocurrency had pared back gains and was trading at about $24,500, down 1.5% in the last 24 hours. The second leading cryptocurrency, Ether, was trading down 2% at about $1,600 on Tuesday.
Chart by Fortune; Data from Bloomberg
The most popular cryptocurrency is facing resistance at the $25,000 level that’s being partly fueled by what could be a higher-than-expected rate increase by the Federal Reserve at its March meeting. St. Louis Federal Reserve President James Bullard said last week that he had pushed for a half-a-percentage-point rate increase at the last meeting and may do so at the March meeting. Cleveland Fed President Loretta Mester concurred. Stocks declined on the news, likely contributing to the hesitancy of investors to push Bitcoin beyond $25,000.
Tougher regulatory enforcement could also be a hindrance for crypto investor optimism. Last week, Paxos said it would stop minting the Binance USD (BUSD) stablecoin, after the New York Department of Financial Services ordered it to do so. The New York-based crypto company also faces a possible lawsuit from the Securities and Exchange commission over whether the cryptocurrency is an unregistered security—an action that could have ramifications for investors and U.S.-based stablecoins.
Despite inflows of $158 million year-to-date, last week Bitcoin saw an increase in money leaving the asset, according to a note from digital investment and trading group CoinShares. There were about $25 million in Bitcoin outflows, the highest among top cryptocurrencies, along with $3.7 million in inflows to investment products meant to short it—or bet on it losing value.
Still, after an abysmal end to 2022, Bitcoin is up nearly 50% in 2023. Last week, fueled in part by emerging NFT collection Ordinals, the total number of Bitcoin wallet addresses with a non-zero balance reached an all-time high of 44 million, according to a note from crypto exchange Bitfinex.
“This suggests an influx of new investors, likely helping drive the recent gains for Bitcoin,” the exchange wrote.
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