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Long-Term Crypto Holders Continue To Buy Bitcoin Below $24,000

February 28, 2023
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The price of BitcoinBTCUSD +0.08% as well as other cryptocurrencies fell on Tuesday, with digital assets stalling after their rally at the start of the year. Even so, there are still signs of bullishness across the crypto markets, including the continued accumulation of Bitcoin by long-term investors, and this can be seen across all crypto markets.

There has been a 0.5% drop in Bitcoin price over the last 24 hours, down to just shy of $23,300, after trading above $23,800 on Monday. The largest crypto has had a tough time getting past the $24,000 level. This is to say nothing of the $25,000 price level, which represents the recent peak of the crypto and its highest level since last summer. The price has remained higher than it was at the beginning of 2023 when it was below $16,500.

"Bitcoin is trading a bit lower today following a loss of the bulk of its Monday gains late in the session," said Craig Erlam, an analyst at the broker Oanda, in a recent report. “Despite what has been a phenomenal start to the year, cryptocurrency prices continue to exhibit strong resilience, but it is possible that some profit-taking is setting in after what has been a remarkable start to the year. There is still considerable resistance around $24,500-$25,500, a break of which could be very bullish for the price."

Despite the fact that digital assets outperformed the stock market to start the year, that momentum has largely stalled, with Bitcoin trading nearer to the Dow Jones Industrial AverageDJIA +0.22% and the S&P 500SPX +0.31% than it did to begin the year. It has been observed that cryptos and equities have become correlated over the past year as a result of high inflation and rising interest rates, and it is likely that both asset classes will remain under pressure in the short term as investors are still concerned about these elements.

Crypto traders, on the other hand, continue to exhibit optimism that Bitcoin's latest jump may be the beginning of the end of a brutal bear market that has seen the largest crypto slide from its late-2021 high near $69,000 to its current low near $35,000 in the past few weeks.

The focus is on long-term holders—that is, crypto investors who don't simply trade coins but accumulate Bitcoin aggressively despite the price increase. Bitcoin exchange Bitfinex analysts estimate that this group bought more than 18,000 Bitcoin over the past week, or more than $420 million.

“As a result of the Long-Term Holder Supply pushing higher, Bitfinex analysts wrote in a note that it is a positive indicator of bear market bottoms, as it constitutes a large portion of Bitcoin supply. It is also a sign of a 40% price increase since the beginning of this year. Although this isn't an immediate buy signal, it indicates that whales and long-term holders still have confidence in Bitcoin's price appreciation.”

In addition to Bitcoin, EtherETHUSD +0.47%, the second largest cryptocurrency, decreased by 1% to $1,620. Smaller cryptocurrencies or altcoins showed mixed results, with Cardano shedding less than 1% while Polygon drew 2.5% down. Dogecoin and Shiba InuSHIBUSD –0.80% showed similar behavior, with Dogecoin above flat and Shiba InuSHIBUSD –0.80%  shedding 3%.

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