Bitcoin
and other cryptocurrencies wavered Monday with the largest digital asset testing its recent peak and marking the highest levels since early 2022. Technical indicators suggest a decline in prices may be due.
The price of Bitcoin has shed less than 1% over the past 24 hours to $48,000, having previously traded as high as $48,800. The biggest crypto is just shy of its mid-January peak near $49,000—in turn, the highest level since before tokens slid into a brutal bear market in spring 2022—with a rally across the past week helping prices march higher from the $42,000 zone.
“Caution is building as we approach the January peak. Bulls have clearly become more cautious,” said Alex Kuptsikevich, an analyst at broker FxPro.
Bitcoin’s surge in January and ongoing strength have been driven by the U.S. approval of spot Bitcoin exchange-traded funds (ETFs) as well as buoyant risk sentiment in wider markets, with the
Dow Jones Industrial Average
and
S&P 500
around all-time highs. But on the back of such big gains, the prospect of profit-taking across crypto looms.
“Bitcoin posted its seventh consecutive day of gains, but the strengthening slowed over the weekend. It also coincided with a move above 70 on the RSI on the daily timeframes, which could increase players’ appetite for short-term profit-taking,” said Kuptsikevich.
Indeed, the relative strength index (RSI) for Bitcoin crossed above 70, which is a technical signal that could signal that the token is overbought and set the stage for some traders to exit for the time being. On the other hand, Bitcoin notched its highest weekly close since early 2022 this past week—a technical green flag that could pave the way for more gains.
Beyond Bitcoin,
Ether
—the second-largest crypto—dropped 2% to $2,475. Smaller tokens or altcoins were weaker, with
Cardano
and
Polygon
losing 4% each. Memecoins exhibited more of the same, with
Dogecoin
down 4% and
Shiba Inu
shedding 3%.
Write to Jack Denton at [email protected]
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