Bitcoin, according to what has become its motto at the end of the year, is starting the week with a sign of calm. But crypto fans are watching for a technical signal that could potentially point to a new breakout.
Bitcoin, according to what has become its motto at the end of the year, is starting the week with a sign of calm. But crypto fans are watching for a technical signal that could potentially point to a new breakout.
Bitcoin supply in private wallets on exchanges has hit a three-year low, according to data compiled by Glassnode. Stephane Ouellette, chief executive officer of FRNT Financial Inc.
“If there is a lot of BTC on exchanges, then people are willing to sell,” he said. “If it were to be exchanged in private wallets, they might be less willing to sell. It’s a way of saying HODLers have more control,” he said, referring to a crypto community acronym for long-term devotees.
The largest digital asset by market value fell less than 1% at 12:03 pm in New York to trade around $41,229. It has been glued to a tight trading range for the past few months, unable to break through any of the highs it hit at the start of the year.
Market watchers have several explanations, including that speculative water has dried up as the Federal Reserve and other central banks begin to raise interest rates. Another thing is that as long as Bitcoin falls below $47,000 – the breakeven point for many new investors – it will remain stuck in its tight range because short-term traders will be selling at every increase.
Cryptocurrencies have been besieged by the same forces that have undermined other risk assets, including US stocks, this year. Investors are worried about an economic slowdown amid rising commodity prices due to the war in Ukraine. Meanwhile, cryptocurrencies have come under renewed scrutiny amid debate around whether they can be used by anyone trying to circumvent sanctions. The Bloomberg Galaxy Crypto Index is down 19% as of Friday.
Aoifinn Devitt, chief investment officer at Moneta, said the fact that the cryptocurrency has been around for just over a decade means that there is little history to gauge how it might perform in a different environment. shock market or a place with persistent inflation.
“We are in the process of exploring this right now, we are discovering that it tends to be a very high risk reward asset and has a tendency to sell off,” Devitt said by phone from Chicago. when risk is inevitable. “Because that discovery is happening, there have been shock waves spreading across the markets, there is certainly not a flight to safety for crypto.”
