Bitcoin
and other cryptocurrencies settled on Tuesday after one of the worst crypto selloffs this year, though digital assets continue to hold on to gains from a recent rally that has carried prices to their highest levels since April 2022.
The price of Bitcoin was down less than 1% over the past 24 hours to $41,800, having briefly traded below $41,000 on Monday amid the worst selloff for the token on a daily time frame since early March, according to Dow Jones Market Data. Bitcoin has retreated from its recent peak above $44,000—the highest point since April 2022—but still remains up by more than 50% in two months in the latest stage of a crypto recovery this year that has sparked calls for a new bull market.
“Bitcoin [pulled back on Monday], but it has yet to impact our short-term trend following gauges, which point higher,” said Katie Stockton, managing partner at technical research firm Fairlead Strategies.
The major narrative driving Bitcoin prices higher in recent months has been optimism that U.S. regulators will soon approve the first spot Bitcoin exchange-traded fund (ETF), which would be expected to usher in a fresh wave of investor interest.
An improving macroeconomic backdrop has also helped, particularly recent signs of waning inflation and slowing growth that have raised expectations that the Federal Reserve will cut interest rates multiple times next year. Higher rates have heaped pressure on tokens and other risk-sensitive bets like stocks since 2022, and hopes that borrowing costs will soon come down represent a key tailwind for both asset classes.
In focus on Tuesday is inflation data in the form of the U.S. consumer price index (CPI) for November, which could move cryptos just like the
Dow Jones Industrial Average
and
S&P 500
in the stock market. Ahead of the Fed’s next monetary policy decision, due Wednesday, the inflation reading could shift estimates for the first possible rate cut next year, which is currently being priced-in for March. The CPI print was in line with expectations, with consumer prices rising 3.1% from a year ago. Bitcoin was little moved in the immediate wake of the release.
From a technical market perspective, analysts see the move lower in Bitcoin—which some blamed on profit-taking—as doing little to shake the bullish narrative, with momentum remaining behind crypto prices.
“Bitcoin would confirm another breakout if it can finish this Sunday above around $42,200 resistance. If confirmed, a breakout would put next resistance near $48,600,” said Stockton. “Intermediate-term momentum remains strongly positive … suggesting overbought conditions can be sustained without a major pullback in the weeks ahead. Initial support for bitcoin is at the rising 50-day moving average around $37,400.”
Beyond Bitcoin,
Ether
—the second-largest crypto—lost less than 1% to $2,220. Smaller tokens or altcoins had a more firm rebound, with
Cardano
climbing 9% and
Polygon
pushing 6% higher. Memecoins were more muted, with
Dogecoin
up less than 1% and
Shiba Inu
trading 2% in the green.
Write to Jack Denton at [email protected]
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