Bitcoin Halts Momentum Briefly on Retail Selloffs
The price of Bitcoin shed 3% over the past 24 hours, now trading below $34,400 from about $36,000, its highest level since May 2022. It has since rallied 70% to $34,300. Due to improved sentiment, the most expensive crypto asset has rallied some 30% in weeks.
Crypto traders remain optimistic that the rally is only beginning. Crypto bulls expect the recent momentum to continue, according to Lin, who pointed to significant concentrations of December Bitcoin call options at the $40,000, $45,000, and $50,000 levels.
Due to price actions, BTC snapped out of a multi-month period through the summer during which Bitcoin volatility and trading volume had fallen to historical lows.
Other crypto assets also nosedived due to bears’ return into the space with Ethereum losing initial steam. Ether — the second-largest crypto — fell 2% to below $1,800.
Smaller tokens or altcoins were more mixed. Cardano has climbed 4% but Polygon is down by 2% at the press time. Memecoins were in the red, with Dogecoin and Shiba Inu shedding 3% each.
Ethereum attempted a fresh increase above the $1,850 resistance but upsides were limited, like Bitcoin. ETH traded as high as $1,874 and recently started a downside correction.
Bitcoin has been propelled largely by optimism that U.S. regulators will soon approve the launch of spot Bitcoin exchange-traded funds (ETFs), which is expected to usher in a fresh wave of retail and institutional investor interest in digital assets.
Geopolitical risk from conflict in the Middle East has also renewed the “digital gold” narrative for Bitcoin, with bulls pitching the token as a haven asset.
The downside remains that the use of the crypto asset to fund terrorism in some regions. Like the Dow Jones Industrial Average and S&P 500, Bitcoin most recently advanced on the back of the latest decision from the Federal Reserve to hold steady on interest rates.
There are also signs from within crypto markets that the trading environment is growing more robust. After Bitcoin’s summer slump, larger traders are coming back into the market — signalling renewed institutional interest — Bitcoin, Other Crypto Assets Slump on Retail Selloffs