Other cryptocurrencies fell on Wednesday, in line with the stock market as digital assets continued to be affected by macroeconomic forces. But the bullish signs still suggest that the cryptocurrency is in a positive groove.
Bitcoin price is down 2% in the past 24 hours to $29,100, dropping below the psychologically important $30,000 level — which marks where prices reached last June, before the crypto sell-off accelerated in a brutal bear market. . The largest digital asset crossed $30,000 last week, rising to nearly $31,000 at some points, but it struggled to consolidate gains or move higher amid some signs of profit-taking.
“It looks like bitcoin may consolidate here, but a rally above $31,500 could open the door for some momentum deals,” said Edward Moya, analyst at broker Oanda.
Pushing prices lower in the short term has led to broader concerns about inflation and the potential for further interest rate increases, which has also been weighing on the market.
Dow Jones Industrial Average
Standard & Poor’s 500.
A series of massive interest rate hikes from the Federal Reserve last year — in an effort to tame decades-high inflation — has drastically dampened demand for risk-sensitive assets, drawing criticism from both cryptocurrencies and stocks. While Bitcoin’s rally this year has come amid expectations of easier monetary policy from the Federal Reserve, the narrative remains weak.
Among the recent catalysts that shook investor confidence in the prospect of more loose monetary policy were comments from St. Louis Federal Reserve President James Bullard, who called for another rate hike on Tuesday. Hot inflation data released from the UK on Wednesday sparked global concerns about continued price growth.
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“Worry that interest rates will continue to rise in the US is spreading through financial markets as investors worry that further tightening will increase the chances of a recession and cause ripple effects around the world,” said Susanna Streeter, an analyst at brokerage Hargreaves Lansdowne.
But, more broadly, there are still several bullish signs for Bitcoin, which has already climbed about 80% so far this year in a rally from the depths of the “crypto winter,” spurring fresh bull market calls for the digital asset. Bitcoin recently closed in on its best quarterly return since its all-time high in late 2021.
“The strong market performance in 2023 is a stark contrast to 2022, and signals a positive shift in the system,” analysts at crypto market intelligence firm Glassnode wrote in a recent note.
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“Many on-chain indications suggest that bear market conditions (or at least the worst of them) may now be behind us,” Glassnode analysts wrote, referring to blockchain network data covering individual Bitcoin trades, which has been closely scrutinized by analysts as it was like that. “Surprisingly consistent.”
Bitcoin is in a “neutral zone,” according to Glassnode, holding above the $16,000-$25,000 area where significant bitcoin volume has been taking place. “We note that much of this supply remains firmly held by these buyers, while profits are being taken, and network utilization is improving, all of which support the strong market performance,” the analysts wrote.
The second-largest cryptocurrency, which has outperformed since the Ethereum blockchain successfully completed a significant upgrade last week, is down 5% below the key $2,000 level. Minor cryptocurrencies, or altcoins, were also weak, with
by 6% each. Memecoins were like no other, eg
Both are down 6%.
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