The Bitcoin (CRYPTO: BTC) price has edged up 1% over the past few hours. Yet the world's original crypto is down 13% since this time last week, currently trading for US$21,463 (AU$31,131).
Meanwhile, Ethereum (CRYPTO: ETH), the world's number two token by market cap, has tumbled 19% over the seven days, according to data from CoinMarketCap. Ether is currently trading for US$1,605.
That's a far different story than we saw playing out in July.
Last month BTC gained 22% while the Ethereum price rocked 56% higher.
Which begs the question, is the Bitcoin price rally and broader crypto charge over?
Image source: Getty Images
Why is the Bitcoin price in retreat?
After posting a strong run from mid-June through mid-August, part of the past week's price falls are likely due to some near-term profit taking.
A larger part of the retreat comes from the renewed risk-off sentiment among global investors. This follows on last week's release of the minutes from the US Federal Reserve, which reiterated the central bank's intentions to continue lifting interest rates until it gets soaring inflation under control
The Bitcoin price has moved very much in tangent with risk assets in 2022, though often with bigger ups and downs than witnessed with growth shares.
With investors re-evaluating the prospect of sharply higher rates, the tech-heavy NASDAQ closed down 2% on Friday. That put the index down 2.7% for the week after a lengthy stretch of gains.
That doesn't necessarily mean the Bitcoin price won't rally higher again. But so long as other risk assets are floundering, cryptos will have a hard time recouping their former highs.
All-time highs
It's easy to forget that both of the world's top two cryptos were trading at all-time highs just nine short months ago.
The Bitcoin price hit record highs of US$68,790 on 10 November 2021. It's down 69% from that high water mark.
As for Ethereum, it reached its own apex on 16 November, trading for US$4,892. Ether has dropped 68% from those highs.
