Data shows long-term Bitcoin investors have held strong
Meanwhile, the short-term bears are trying to push the price lower
Support in the $25,000 is a key area that has held firm so far
The start of September hasn’t shaken up much, as It’s still trading in a narrow range. Any attempt at a strong upward move since August 29 has been swiftly met by heavy selling pressure.
There are a few key factors working against the bulls right now: low volatility, a general aversion to risk, and the high likelihood that the Federal Reserve will keep its hawkish policy, maybe even continue hiking interest rates.
However, on the flip side, there’s a glimmer of hope for a long-term uptrend. It might come from investors who’ve been holding their Bitcoin for over three years and perhaps intend to hold onto it even longer.
Meanwhile, is stuck in a similar sluggish state. However, recent large transactions on Coinbase (NASDAQ:) could cause a surge in trading volumes in the short term.
Bitcoin: Long-Term Holders Remain Confident
Glassnode’s stats paint a positive picture of Bitcoin’s long-term growth. A significant 40.53% of all Bitcoins haven’t moved from their addresses for at least three years. Less than 30% have been held for over five years.
This suggests that a substantial number of investors have faith in the top cryptocurrency, as they’ve weathered recent market turbulence without selling. The key factor now is how short-term investors behave, as their return to the market is crucial for any significant price movements.
Interestingly, weather conditions are impacting not just the agricultural commodities market but also cryptocurrency mining. Marathon Digital Holdings (NASDAQ:) reported a 9% month-on-month drop in extraction due to hot weather in Texas.
Nonetheless, daily mine output has increased significantly, going from 5.9 BTC to 34.3 BTC compared to 2022.
Volatility Likely in September for Bitcoin?
Historically, September hasn’t been the best month for Bitcoin. Looking back over thirteen years, there have been negative returns nine times during this month.
Bitcoin Monthly Returns
Source: Coinbase
Adding to the concern, CryptoQuant data reveals that the trading volume in mid-August hit 112,317 BTC, the lowest since November 2018.
Just to put things in perspective, the peak trading volume in March reached a whopping 3.5 million BTC, highlighting the stark decline in trading activity.
Such a situation often accompanies a market downturn and indicates the withdrawal of individual investors.
Bitcoin’s Key Levels
For now, the $25,000 price mark remains a crucial support level for Bitcoin. Except for a brief upward movement at the end of August, Bitcoin’s prices have been locked in a narrow consolidation for the past three weeks, largely hinging on this support level.
Bitcoin Daily Chart
Should the bears successfully breach this level, it would pave the way for a more substantial price drop, with the next target around the $20,000 mark, a demand zone.
We can entertain the idea of bulls taking charge only in case of a strong rally that surpasses the $28,000 level.
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Disclaimer: This article is for information purposes only; it is not intended to encourage the purchase of assets in any way, and does not constitute a solicitation, offer, recommendation, opinion, advice or investment recommendation. We remind you that all assets are considered from different angles and are extremely risky, so that the investment decision and the associated risk are specific to the investor.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
