Bitcoin enters adjustment phase, LTHs resume accumulation mode
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Bitcoin enters adjustment phase, LTHs resume accumulation mode
As the market begins entering the golden period following the Bitcoin halving, calls for a bullish breakout rebound are becoming increasingly frequent.
Navigating Web3 tides with focused insightsBy TechFlow Mary Liu
On Wednesday, financial markets declined in trading after the yield on U.S. 10-year Treasury notes surged to 4.64%, unsettling investors already concerned about the outlook for rate cuts in 2024.
Bitpush News data shows that Bitcoin's early-session rally stalled at $68,860 before sellers took control, pushing BTC down to a daily low of $67,100 following the U.S. stock market close. At the time of writing, Bitcoin was trading at $67,501, down 1.52% over the past 24 hours.
Analysts at Secure Digital Markets said: "As expected, Bitcoin continues to pull back toward the 20-day moving average near $66,500. The support zone between $65,000 and $66,000 remains strong for now. However, as long as the dollar index and 10-year yields remain on an upward trajectory, we expect risk assets to continue facing pressure."
Altcoins broadly declined, with most of the top 200 cryptocurrencies by market cap posting losses, except for a few meme tokens that saw sharp price increases.
DOG•GO•TO•THE•MOON (DOG) led the gains, surging 47.2%, followed by cat in a dogs world (MEW), up 15.6%, and Arkham (ARKM), rising 10%. ConstitutionDAO (PEOPLE) suffered the largest drop, falling 16.3%, while BinaryX declined 16.2% and Bonk (BONK) dropped 11.8%.
The total cryptocurrency market capitalization currently stands at $2.53 trillion, with Bitcoin’s market dominance at 52.6%.
In U.S. equities, rising Treasury yields continued to weigh on markets. At Wednesday's close, the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite were all lower, declining 0.74%, 1.06%, and 0.58%, respectively.
Long-term Bitcoin holders resume accumulation for the first time since December last year
According to Glassnode data, long-term Bitcoin holders (LTH) have begun accumulating Bitcoin again for the first time since December 2023, ending months of selling activity.
Glassnode stated in its latest report: "Bitcoin is currently slightly below all-time highs and continues to consolidate, with long-term holders resuming accumulation for the first time since December 2023."
Analysts noted that spending pressure from long-term holders has significantly eased over the past week, with investors returning to accumulation mode—indicating that volatility would be required to trigger another wave of selling.
Notably, Glassnode observed that Bitcoin’s price movement over the past three months has been more moderate compared to previous bull cycles. Over this period, weekly, monthly, and quarterly returns exceeded 3.3%, 7.4%, and 25.6% respectively on only five days in the past 90 days.
Analysts added: "In prior cycles, this number ranged between 18 and 26 days, suggesting that the current market may be more cautious relative to historical bull runs."
Short-term weakness preceding new peak
Although most analysts expect Bitcoin consolidation to persist in the short term, a Twitter poll shows increasing calls for a bullish breakout as markets enter the historically strong post-halving phase for Bitcoin.
Market analyst Rekt Capital pointed out, "Bitcoin continues to slide after failing to reclaim the orange zone (shown below) as support," and there are now "signs that this orange zone has turned into new resistance."
However, subsequent analysis highlights that Bitcoin has shown similar weakness in the past just before major price breakouts.
Cryptocurrency trader Jelle warned that volatility could remain elevated over the coming months and encouraged fellow traders to "stay unaffected."
Market analyst Moustache indicated that a "right shoulder descending broadening wedge" pattern might be forming, which could imply a potential breakout above $88,000 in the coming months.
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