Bitcoin stalls below $24,000. But long-term crypto holders are still buying.
Bitcoin
and other cryptocurrencies were lower on Tuesday, with digital assets stalling after their early-year rally. But there are still signs of bullishness across crypto markets, including the continued accumulation of Bitcoin by long-term holders.
The price of Bitcoin has fallen 0.5% in the past 24 hours to just $23,300, after trading above $23,800 on Monday. The largest crypto has faced resistance at the $24,000 level – to say nothing of $25,000, the price level that represents its most recent peak and the highest levels since last summer. That’s still up from below $16,500 at the start of 2023.
“Bitcoin is trading slightly lower today after giving up the bulk of Monday’s gains late in the session,” said Craig Erlam, analyst at broker Oanda. “We still see strong resistance in crypto, but perhaps some profit-taking is starting after what has been a remarkable start to the year. There is still significant resistance around $24,500-$25,500, a break of which could be a very bullish signal.”
While digital assets significantly outperformed the stock market to start the year, that momentum has largely stalled, with Bitcoin and its peers trading closer to
Dow Jones Industrial Average
and
S&P 500.
Cryptos and equities have been correlated over the past year against a tough macro backdrop of high inflation and rising interest rates, and both asset classes are likely to remain under pressure in the near term with investors remaining concerned about these forces.
But, more broadly, crypto traders continue to show optimism that Bitcoin’s latest jump marks the beginning of the end of a brutal bear market that has seen the biggest crypto fall from its late-2021 high near $69,000.
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In focus is the behavior of long-term holders – i.e. crypto-investors who do not simply trade coins – who have continued to aggressively accumulate Bitcoin despite the price rise. This group collectively bought more than 18,000 Bitcoin, or more than $420 million, in the past week, according to analysts at crypto exchange Bitfinex.
“Long-term holder supply has continued to push higher… [this group] Making up a significant portion of the Bitcoin supply is a crucial feature of the chain at the bottom of the bear market, and is a positive signal taking place amid a 40% price increase since the start of this year, the Bitfinex analysts wrote in a note. “While this is not an immediate buy signal, it indicates that whales and long-term owners still have confidence in Bitcoin price appreciation.”
Beyond Bitcoin,
Ether
—the second largest crypto lost 1% to $1,620. Smaller cryptos or altcoins were more mixed, too
Cardano
less than 1% lower and
Polygon
2.5% in the minus. Memecoins showed more of the same, with
Dogecoin
over flat but
Shiba Inu
drop 3%.
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Write to Jack Denton at [email protected]
