Cryptocurrencies were largely unchanged as recent rallies by market leaders Bitcoin and Ether cooled.

Bitcoin fell about 1% to about $24,074 as of 5 p.m. in New York after hitting $25,000 over the weekend for the first time since the frontier market collapsed in June. The largest cryptocurrency by market value is up about 18% since June 17. Bitcoin reached a record high of nearly $69,000 in the fall.

Ether, which is leading amid optimism about an update to the blockchain software known as Merge, fell nearly 2% to $1,904. It hit $2,000 on Saturday and is up about 75% since mid-June. In November, Ether was worth almost $4,860.

The rally also raised meme tokens like Dogecoin and alternative platforms including Polygon. On Monday, they fell by 5.3% and 4.8%, respectively.

Matt Maley, chief market strategist at Miller Tabak & Co, said the pullback was natural as investors took “some chips off the table.” Maley pointed to problems in the Chinese market as a potential reason for investor caution in today’s session.

“We have to understand that the crypto market is still speculative,” Maley said. “I think it’s normal and healthy to digest the recent gains, especially in Ethereum.”

Alkesh Shah, global crypto and digital asset strategist at Bank of America, said the recent crypto rally was “probably macro-driven” and noted in a note the strong correlation between digital and risk assets.

“Our view is that risks from rising rates, inflation and a mild recession are likely off the table, but the potential for a severe recession is (our macro peers expect S&P EPS to decline in 2023) may lead to under-growth and other correction of risky assets including crypto/digital assets,” said Shah.

© 2022 Bloomberg

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