Bitcoin ($BTC) is on an upswing to begin the year’s third quarter.
On July 2, BTC is trading at $61,600, up 3% in the last 24 hours and above the key support level of $60,000 that analysts watch closely. Other digital assets are also marching higher, with Ethereum ($ETH) also up 3%. Crypto trades around the clock: 24 hours a day, seven days a week.
Investor capital appears to be returning to Bitcoin and other digital assets amid a rotation out of richly valued stocks of microchip companies tied to the artificial intelligence (AI) infrastructure buildout. After tripling in this year’s first half, many chip stocks are experiencing a sharp pullback to begin the third quarter of the year.
Chip Stocks Fall Sharply
High-flying stocks such as SanDisk ($SNDK) and Micron Technology ($MU) each fell 10% on July 1 amid profit taking and a rotation into other areas of the stock market. On July 2, SNDK stock is down another 15% while MU stock has fallen 7% on the day. South Korea’s Kospi index dropped 8% on July 2 as its market dominating chip stocks that include Samsung ($SSNLF) declined as much as 15%.
The recovery in cryptocurrencies comes after the asset class suffered its worst performance in four years during this year’s second quarter. Bitcoin’s price fell nearly 20% in June. Now, it looks as though crypto is benefitting as a rotation is underway in the market to begin the third quarter.
However, some analysts continue to warn investors to proceed cautiously with cryptocurrencies. U.S. bank Citigroup ($C) lowered its target price for Bitcoin over the next year to $82,000 from $112,000 and warned investors about continued volatility in digital assets.
BTC’s Three-Month Performance
Not enough analysts cover Bitcoin, so we’ll look instead at its three-month performance. As one can see in the chart below, Bitcoin’s price has declined 14% in the past 12 weeks.
