Bitcoin
and other cryptocurrencies slipped Tuesday, retreating from recent highs, but crypto traders remain bullish on the latest rally in digital assets with fundamentals and technicals alike fueling bullish sentiment.
The price of Bitcoin has fallen 1% over the past 24 hours to $37,100, with the largest digital asset falling further from an 18-month high notched last week above $38,000, the zenith of a rally that has carried prices more than 30% higher since early October. Bitcoin’s gains largely have come amid optimism that U.S. regulators will soon approve the first spot Bitcoin exchange-traded fund (ETF), a move that is widely expected to usher in a fresh wave of investor interest in cryptos.
“Even without the approval of one or more of these ETFs, Bitcoin could run past $45,000 fairly soon. Momentum is mounting, with investors seeing dips as a time for accumulation,” said Leo Mizuhara, CEO of digital asset management platform Hashnote.
Alongside ETF hopes, Bitcoin also has been buoyed by an improving macroeconomic backdrop, which has similarly boosted the
Dow Jones Industrial Average
and
S&P 500.
Investors are increasingly confident that the Federal Reserve has finished raising interest rates and could cut borrowing costs early next year, a move that would be most supportive of risk-sensitive bets like tokens and tech stocks.
The technical picture also is solid, according to analysts, with Bitcoin holding firmly above a number of key levels—even as prices have taken a pause for now.
“A short-term consolidation phase has a hold on Bitcoin,” said Katie Stockton, managing partner at technical research firm Fairlead Strategies. “Bitcoin would resolve its consolidation phase higher with a move above around $38,000, which would act as a catalyst for a test of around $42,200 … Our long-term indicators have shown improvement, but they are not yet decisively bullish. A breakout above around $42,200 would affirm a long-term bullish reversal.”
Beyond Bitcoin,
Ether
—the second-largest crypto—fell 1.5% to $2,020. Smaller tokens or altcoins were also weak, with
Cardano
down 3% and
Polygon
2% lower. Memecoins were firmly in the red, with
Dogecoin
dropping 3% and
Shiba Inu
shedding 4%.
Write to Jack Denton at jack.denton@barrons.com
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