Bitcoin falls below $50,000 after hitting highs since the December flash crash
Bitcoin falls below $50,000 on Tuesday, after hitting the $52,000 mark on Monday, its first high since Dec. 4th, when the world’s largest cryptocurrency staged a ‘flash crash’ that saw it drop as low as $42,000. Monday’s boom followed several days of gains for both the creation of Satoshi Nakamoto and for the main ‘altcoins’, with some notable rises for Terra, Polkadot or Cardano network tokens. However, they are experiencing a correction that reaches 7% for some of them on Tuesday.
Meanwhile, Ethereum trades below the $4,000 mark and the total market capitalization of cryptoassets also retreats towards $2.3 trillion, against a backdrop of low volume on exchange platforms. Experts point out that low liquidity on all financial exchanges is common during the holiday period and that Monday’s bitcoin rally came at a time of low volume, coinciding with a rise in U.S. stocks, during a week traditionally marked by light yet bullish trading.
Bitcoin’s sovereign supply – the total number of coins held outside of trading platforms – hit an all-time high, as reported by blockchain data firm, Glassnode. This translates to an increase in Bitcoin holdings by 4.8% to reach 74.8% of all sovereign supply during all of 2021, Glassnode noted in its Dec. 27th newsletter. Short-term holders’ Bitcoin ownership fell from 28% last January to 25.2% on Tuesday.
“The behavior we see on the blockchain is usually more typically observed during Bitcoin bear markets, which in retrospect are effectively long periods of redistribution of coins from weaker hands to those with stronger, longer-term conviction,” Glassnode stated.
Bitcoin has successfully held the 20-day exponential moving average ($50,033) over the past few days, which indicates that bulls are buying on the dips. This is likely to attract more buying from the bulls.
If buyers push the price above the 38.2% Fibonacci retracement level at $52,314, they raise the prospects of a rally to the tough upper resistance of $60,000, as indicated by ‘CoinTelegraph’.
