| Get all the essential market news and expert opinions in one place with our daily newsletter. Receive a comprehensive recap of the day’s top stories directly to your inbox. Sign up here! |
(Kitco News) – Thursday was a day of consolidation for Bitcoin (BTC) while the crypto bull market continued for altcoins, led by Ethereum (ETH), which hit a 2023 high of $2,355 in the afternoon and looks poised to continue its rally.
Stocks returned to their winning ways following several days of negative closes, as the latest jobs data showed that the labor market is finally getting back to normal, boosting traders’ confidence that the Federal Reserve is done with interest rate hikes.
After trading in the green for most of the day, the S&P, Dow, and Nasdaq finished higher, up 0.80%, 0.20%, and 1.35%, respectively. The move higher for asset prices came as the DXY briefly fell to 103.276 before being pushed back above 103.6, marking a decline of 0.50% on the daily chart.
Data provided by TradingView shows that Bitcoin lost support at $44,000 during the morning session, dipping to a daily low of $42,845 before climbing back above $43,300, where it trades at the time of writing.
BTC/USD Chart by TradingView
“December Bitcoin futures prices [were] a bit weaker again in early U.S. trading Thursday, after hitting a contract and 20-month high Wednesday,” according to Kitco senior technical analyst Jim Wyckoff.
Bitcoin futures 1-day chart. Source: Kitco
“A price uptrend on the daily bar chart remains firmly in place,” Wyckoff said. “Bulls have the solid overall near-term technical advantage. More price upside is likely in the near term.”
Blockchain analysis firm CryptoQuant predicts that Bitcoin could surpass $50,000 in early 2024 based on an analysis of Bitcoin’s user activity, using the Metcalfe price valuation band metric, and taking into consideration factors like market capitalization, transaction volume, and user activity.
“Bitcoin may be targeting $50,000 to $53,000 based on the network activity valuation perspective,” CryptoQuant analysts said.
The report noted that the Bitcoin bull-bear market cycle indicator shows that we are currently in a bull market, but are nearing an “overheated bull phase,” which has historically been followed by a pause or a correction.
The Bitcoin supply in profit is currently above 88%, and the analysts anticipate that sell pressure may be increasing as a significant portion of the circulating supply of BTC is in profit.
Bitcoin supply in profit. Source: CryptoQuant
“Caution is advised due to the possibility of a short-term correction, given that 86% of the circulating supply is currently in profit and funding rates are noticeably elevated,” the report said. That percentage has since increased to 88%, and the report noted that such high levels of circulating supply in profit “have historically coincided with local tops.”
This aligns with the outlook from numerous analysts, who have been calling for a sizable pullback before Bitcoin starts to climb higher again.
“I think there’s really only two camps you can be in right now for BTC,” said market analyst Crypto Chase. “You either believe we correct from somewhere nearby (43-48 whatever) or you expect new all-time highs. From the best traders I know on here, some have begun shorting (not all), but almost all are taking profit.”
“From the comments and replies, I see an endless stream of euphoria surrounding the ETF,” he said. “‘Omg it’s coming,’ even though the price is up 20K~ since the application announcement. It reads like a typical normie trap to me.”
“If anything, this rally has proven to me that new all-time highs are possible for BTC in a shorter time frame than I expected,” Crypto Chase said. “I didn’t ever really think the forever top was in, but thought it would take many many years. Now I could see us retracing the majority of the ‘ETF rally’ eventually and journeying to new ATHs.”
That said, Crypto Chase noted that he is “still bearish from the 40s, looking for low 30s, or even low 20s before new ATHs.”
“[The] majority will say ‘never below 30 again’ or something of that nature, but we’ve seen what this market can do,” he said. “Every up-only has been followed by a down-only (unless a new ATH leg is coming as I said at the start of this tweet, which I do not believe). Time will tell.”
MN Trading founder Michaël van de Poppe also took the time to remind the community that corrections happen, and that no one ever went broke taking profits.
Gentle reminder; corrections will happen and they’ll be swift.
An approval of a spot #Bitcoin ETF is the largest event in the past years, definitely.
It doesn’t mean markets are going to be moving in a ballistic manner to $200K in one-go.
Take your profits and buy…
— Michaël van de Poppe (@CryptoMichNL) December 6, 2023
Double-digit gainers and losers in the altcoin market
The top 200 tokens were evenly split between winners and losers, with most tokens trading ±3%.
Daily cryptocurrency market performance. Source: Coin360
Axelar (AXL) led the gainers with an increase of 29.5%, while Bonk (BONK) gained 23.3%, and Optimism (OP) climbed 20.1%. BitTorrent (BITT) fell 20.45% to lead the losers, followed by a loss of 19.8% for ORDI (ORDI), and a decline of 9.6% for Centrifuge (CFG).
The overall cryptocurrency market cap now stands at $1.59 trillion, and Bitcoin’s dominance rate is 52.9%.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.