Bitcoin
and other cryptocurrencies were little changed Wednesday as the digital asset market steadied after a recent selloff ushered in the biggest one-day decline this year. Amid the current lull, analysts see technical factors supporting a bearish trend.
The price of Bitcoin has traded flat over the past 24 hours and was holding above $26,000. The largest crypto has been relatively stable in recent days after a market rout last week drove Bitcoin down above $29,000 to a trough near $25,500, the lowest levels since mid-June. That selloff—2023’s biggest single-day decline—snapped a period of historically low volatility for Bitcoin, which again looks to be in a holding pattern.
“We saw a bit of a stabilization in the cryptocurrency market led by Bitcoin,” said Samer Hasn, an analyst at broker XS. “Developments on the regulatory and legal side, especially in the U.S., will continue to dominate the focus of cryptocurrency traders for at least the next few weeks,” Hasn added.
Bitcoin could take its queues from the stock market this week, with the
Dow Jones Industrial Average
and
S&P 500
poised to react to earnings from
Nvidia
(ticker: NVDA) and news from the Jackson Hole economic symposium. Both of those events could be catalysts for wider risk sentiment and influence crypto prices.
Other, more technical market factors endogenous to Bitcoin are also at play.
In focus are significant unrealized losses that short-term holders of Bitcoin have been sitting on, analysts at crypto market intelligence firm Glassnode wrote in a recent note. While many Bitcoin owners are long-term holders—generally unfazed by price swings—short-term holders are much more sensitive to prices, and the significant majority of this cohort have a cost basis on their Bitcoin holdings above $29,000.
“The short-term holder cohort are both largely underwater on their holdings, and increasingly price sensitive,” the Glassnode analysts said. “This is compounded by an acceleration in short-term holder realized losses being sent to exchanges, as well as the loss of key technical moving average support, putting the bulls on the back-foot.”
Beyond Bitcoin,
Ether
—the second-largest token—fell 1% to below $1,650. Smaller cryptos, or altcoins, were more mixed, with
Cardano
slipping less than 1% and
Polygon
popping 1% into the green. Memecoins rose, with
Dogecoin
up 1% and
Shiba Inu
advancing 3%.
Write to Jack Denton at [email protected]
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