price bitcoin and other cryptocurrencies on Friday as they traded in conjunction with stocks, which have increased this week as risk sentiment improves.

But despite a series of high-profile failures this year that have waned institutional interest in the sector, crypto still faces existential risks.

Bitcoin price rose 2% in the past 24 hours to $17,200, trading near the digital asset’s latest rally. Despite this, the bitcoin price is still down about 20% in a month since the shocking bankruptcy of cryptocurrency exchange FTX on November 11. Bitcoin is trading at about a quarter of its record high in late 2021, but it is still above its record price. Lows of the last two years of $15,500.

According to Edward Moya, an analyst with the broker OandaAnd the

“Bitcoin appears to be stuck in a swing around the $17,000 level until we get past some key pricing data and [Federal Reserve] resolution.”

Due to the collapse of FTX, there have been no recent developments in the cryptocurrency, resulting in a lull.

The Dow Jones Industrial Average and the S&P 500 are fluctuating in tandem with Bitcoin and its peers, as they have for most of 2022, despite a challenging macro environment characterized by high inflation and rising interest rates. This link has been a double-edged sword in the cryptocurrency market since the FTX crash, as tokens have followed stocks higher while also being vulnerable to a price crash when stocks are down.

At the end of the week, investor sentiment rose. The Consumer Price Index is due next week, followed by Friday’s release of inflation data from the Producer Price Index. The Fed’s monetary policy decision, which will be announced after its meeting on December 13-14, will be the main event, as the institution is expected to ease its painful schedule of rate hikes.

Until then, traders should anticipate that cryptocurrencies will continue to move closely with stocks, even though the Bitcoin technical outlook points to some weakness.

“Bitcoin held $16,800 despite the S&P 500 dropping significantly this week, which could be a sign of strength in the short term. However, the technical analysis suggests that we may have some downsides” – Marcus Sotirio, analyst at brokerage firm GlobalBlock digital assets

However, there are more important matters at hand than the near future.

Institutions have been shaken by recent events in the crypto world

Institutional investors appear to be turning away as a result of FTX breakdown, which sent cryptocurrency prices down and raised concerns about a crackdown on regulation. The digital currency industry has long engaged with institutions such as banks and pension funds, as their participation is seen as a critical requirement for the upward movement of token prices and broader adoption of digital assets.

According to Reuters this week, which cited two unnamed sources, CPP Investments, Canada’s largest pension fund, has abandoned efforts to seek investment opportunities in cryptocurrency. The Teachers Pension Plan of Ontario and the Caisse de Dépôt et Placement du Québec (CDPQ) have reduced their private investments in cryptocurrency companies to zero as a result of similar negative experiences with digital assets. Cryptocurrency lenders Celsius and FTX, which both filed for bankruptcy this year, had investors including CDPQ and Ontario Teachers.

These actions highlight how difficult it is for established institutions to get involved in cryptocurrencies. According to Stéphane Ouellet, CEO of cryptocurrency derivatives broker FRNT Financial, the Celsius and FTX bankruptcies also show the lack of clear metrics for assessing the viability of cryptocurrency businesses.

“Despite some inroads into Bitcoin and cryptocurrency by traditional finance firms, a clear path toward participation in cryptocurrencies has not been established for the majority of existing financial institutions.”

Ether, the second largest cryptocurrency after bitcoin, rose 4% to more than $1,275. Cardano and Polygon, two smaller altcoins, saw gains of 1% and 3%, respectively. Dogecoin and Shiba Inu both saw gains of 2%, which put memecoins in the black as well.

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