Bitcoin Drops $69.2K After Quick $70,000 Rise

Bitcoin dropped to $69,200 after it momentarily touched $70K amid profit-taking and bullish long-term holder sentiment.

TakeAway Points:

  • After momentarily surpassing $70,000, bitcoin fell to $69,200 due to profit-taking, mirroring general patterns in the US stock market.
  • Long-term holders have great conviction despite bad news and recent declines, with 50% of the BTC supply remaining dormant.
  • Increased trading activity and the expectation of the adoption of an ETH spot ETF are fueling demand, and market sentiment remains strong.

The Quick Increase in Bitcoin and Profit-Taking

After briefly rising above $70,000 late on Monday, Bitcoin (BTC) fell back to $69,200 early on Tuesday due to profit-taking.

According to the report, this price action is indicative of a larger trend of high-risk betting in the US financial markets. In the last day, the most valuable cryptocurrency by market capitalization gained 2%, although Ethereum’s ETH  barely moved from $3,800 to $3,800. Over the same period, the CoinDesk 20 Index, which monitors the biggest tokens minus stablecoins, increased by 1.6%.

The return of well-known equity trader Keith Gill, popularly known as “Roaring Kitty,” whose actions have historically stimulated market enthusiasm, had an impact on the most recent price fluctuations in Bitcoin. According to Bitfinex, the dramatic drop in Bitcoin since March is most likely the result of long-term investors surrendering their holdings.
Blockchain data, however, shows that this tendency has stopped, and investors are again buying more Bitcoin, pointing to a possible end to the corrective period.

Long-Term Owner Attitude

50% of the long-term Bitcoin supply is “inactive,” meaning that there are no movements or changes in holdings across tracked wallets, according to on-chain analysis firm CryptoQuant. The report states that this lack of activity is seen as a sign of strong long-term conviction and may herald further price increases.
Analysts at Bitfinex agreed, pointing out that despite price stability, there has been an increase in the quantity of new Bitcoin and Ethereum accumulation addresses over the previous month, indicating an increased optimistic attitude.

“The market remains stubbornly bullish in spite of negative headlines about Mt. Gox and the DMM hack last week,” said QCP Capital in a broadcast message. 

“BTC rallied confidently above $69,000 in Asia. This bullishness is likely to continue as the market waits for the ETH spot ETF to usher in new demand.” 

In addition, the company saw that traders are growing their long positions in other significant cryptocurrencies in the hopes of receiving approvals for more spot ETFs soon.

Variable Results for All Major Tokens

The report added that while Ethereum and Bitcoin had mixed results, other significant tokens such as Cardano’s ADA and Solana’s SOL saw increases of up to 3%. Ether (ETH) and Dogecoin (DOGE) both experienced minor losses. The market value of larger tokens, such as the dog-themed Floki (FLOKI) and the synthetic dollar project Ethena’s ENA tokens, increased by more than 10%.

Over the last day, the CoinDesk 20 Index—a broad measure of the biggest tokens minus stablecoins—has increased by 0.41%. This uneven performance among the main tokens reflects the current state of the market and the differing attitudes of investors.

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