Bitcoin experienced a sudden drop to $27,300 after its rally above $28,000 proved to be short-lived. Despite this, Bitcoin remains in a bull market and defies the market rout in equity and U.S. Treasury bond trading, according to ByteTree CIO. On Thursday, Bitcoin briefly surged above $28,000 during U.S. morning hours, only to drop as low as $27,300 as traders took the opportunity to sell the rally. Currently, the largest cryptocurrency by market capitalization is trading at $27,500, showing no significant change over the past 24 hours, but still outperforming the wider crypto market. The CoinDesk Market Index (CMI), which includes a broad range of digital assets, is down 0.3%, while ether (ETH) has slid 1.8% over the same period.
John Glover, chief investment officer of Ledn, predicts that the market will sell into this rally in the near term, given the absence of new capital flowing into digital assets. He believes that this rally will be short-lived. However, Glover expects a more sustainable appreciation to occur later this year and early next year, as bitcoin seems to have completed its corrective move. He states, “I do believe that BTC prices will be higher in three months than they are today as technically we’ve completed the sell-off and I now look for a sustained rally into Q2 2024.”
ByteTree, an investment research firm, upgraded its BTC market signal from neutral to bull in a report on Thursday. The recent price action of Bitcoin has defied a turbulent period for traditional financial markets, offering a safe haven from the market rout in equity and bond trading. Charlie Morris, chief investment officer of ByteTree, stated, “Bitcoin futures look good, especially when you compare them to the crisis in the bond market. It is the true safe haven from Uncle Sam’s bonds.” He highlighted that BTC is outperforming the U.S. stock market at a time when surging bond yields are wreaking havoc on traditional markets. Morris also noted that during BTC’s recent corrective move, the cryptocurrency held above the key $25,000 level, which acted as a price cap between May 2022 and March 2023. He believes that if BTC can maintain this level, it is very much in a bull market, albeit a quiet one.
Edward Moya, senior market analyst of the Americas at forex trading firm Oanda, points out that BTC remains “trapped in its $26,000 to $30,000 cage.” He adds that the bond market sell-off’s refusal to end is preventing crypto investors from becoming more optimistic and will likely cripple many crypto startups. Despite these challenges, Bitcoin continues to demonstrate resilience and remains a focal point for investors seeking refuge from the volatility of traditional markets.