BTC is in a period of adjustment, LTH starts hoarding coins again

Financial markets were pressured to fall in trading on Wednesday after the 10-year U.S. Treasury yield surged to 4.64%, unsettling investors who were already concerned about the prospect of a 2024 rate cut.

Bitpush data shows that the early gains of Bitcoin bulls stalled at $68,860, and then bears took the upper hand. After the U.S. stock market closed, BTC fell to a daily low of $67,100. As of press time, Bitcoin is trading at $67,501, down 1.52% in 24 hours.

"As expected, Bitcoin continued to pull back to the 20-day moving average near 66,500. Currently, the support range of 65,000-66,000 remains strong. But as long as the US dollar index and 10-year yields are trending upward, we expect risk assets to remain under pressure," said analysts at Secure Digital Markets.

Altcoins fell across the board. Except for a few meme tokens that soared in price, most of the top 200 altcoins by market capitalization suffered losses.

DOG•GO•TO•THE•MOON (DOG) led the gains, up 47.2%, followed by cat in a dogs world (MEW) up 15.6%, and Arkham (ARKM) up 10%. ConstitutionDAO (PEOPLE) was the biggest loser, down 16.3%, while BinaryX fell 16.2% and Bonk (BONK) fell 11.8%.

The current overall market value of cryptocurrencies is $2.53 trillion, and Bitcoin’s market share is 52.6%.

In the U.S. stock market, rising U.S. Treasury yields continued to put pressure on the broader market. At the close of Wednesday, the S&P 500, Dow Jones and Nasdaq all fell, down 0.74%, 1.06% and 0.58% respectively.

Long-term Bitcoin holders are hoarding coins again since December

Glassnode data shows that long-term Bitcoin holders (LTH) have begun to re-stock their coins for the first time since December 2023 after months of selling.

“Bitcoin is currently trading slightly below its all-time high and continues to consolidate, with long-term holders beginning to re-accumulate Bitcoin for the first time since December 2023,” Glassnode said in a recent report.

Analysts noted that spending pressure on long-term holders has eased significantly over the past week, with investors returning to accumulation mode, suggesting that volatility is necessary to trigger a new round of selling.

Notably, Glassnode observed that Bitcoin’s price action over the past three months has been more modest than previous bull cycles, with weekly, monthly and quarterly gains exceeding 3.3%, 7.4% and 25.6% respectively over the past three months, while only five days over the past 90 days saw gains exceeding 3.3%, 7.4% and 25.6%.

“In previous cycles, this number reached between 18 and 26 days, suggesting that the current market may be more cautious relative to historical bull markets,” the analyst added.

Short-term weakness followed by a peak

While most analysts expect Bitcoin’s consolidation to continue in the short term, a Twitter poll shows that calls for a bullish breakout rally are becoming more frequent as the market begins to enter its golden period after Bitcoin’s halving, when Bitcoin prices have historically trended upward.

Market analyst Rekt Capital noted that “Bitcoin continues to slide after failing to recapture the orange area (pictured below) as support” and that there are now “signs that the orange area has become a new resistance level.”

But follow-up articles offer some perspective, suggesting that Bitcoin has a similar history of weakness before breaking out to higher highs.

Cryptocurrency trader Jelle warned that volatility is likely to remain high in the coming months and encouraged other traders to “stay out of it.”

Market analyst Moustache noted that a “right-angle descending extending wedge” may be forming, which means a breakout above $88,000 is possible in the coming months.