Bitcoin demonstrated a significant fluctuation in its trading performance, reaching close to $70,000 on Wednesday before retreating to approximately $68,300 in Thursday morning trading. This marked a notable swing, with the cryptocurrency experiencing nearly a 5% variation from its session high of $70,000 down to an overnight low of $67,700. This moment represented the most impressive attempt to reclaim the $70,000 level since the sharp decline on February 5. However, it ultimately fell short of achieving a definitive breakout.
Underlying the performance of Bitcoin was a more pronounced trend in altcoins, which outstripped Bitcoin’s modest gains. Notably, ether surged by 8.5%, solana rose by 6.9%, cardano saw a striking increase of 10.8%, and dogecoin went up by 8.3%. In comparison, Bitcoin’s gain of 4.3% ranked among the least impressive within the top ten cryptocurrencies. Such divergence in performance typically indicates a renewed risk appetite among traders, who tend to pursue higher-risk investments once they feel the market has hit the bottom.
Evidencing this sentiment, Daniel Reis-Faria, CEO of ZeroStack, remarked, “The wave of forced selling is starting to clear out. Altcoins are outperforming again, and more of them are ahead of bitcoin. That tells me we’re seeing a rotation.” This resurgence in altcoins coincided with mixed reactions to Nvidia’s quarterly earnings report, which, while surpassing expectations, failed to maintain a strong rally. Following this, Nasdaq 100 futures experienced a slight decline of 0.3%, and Nvidia’s shares relinquished a sizeable portion of their post-earnings gains, rising only by 0.2% in after-hours trading. The company’s notes on an overheated AI market tempered the optimism that had been driving tech stock recoveries.
In this context, the macroeconomic environment appears to be precarious for sustained action within the cryptocurrency markets. Wintermute, a prominent market maker, highlighted that cryptocurrencies have been losing traction alongside tech stocks as investment capital shifts towards more defensive and tangible assets. Furthermore, Matrixport, a crypto finance platform, pointed to stagnation in stablecoin supply as a considerable challenge for Bitcoin’s progress. Onchain data from Glassnode suggests that broader liquidity might not stabilize for another six months.
The immediate risk landscape is becoming clearer. Data from Cryptoquant indicates that selling activity has slowed down on the Binance exchange, bolstering the potential for a short-term rebound. In contrast, crypto exchange Bitrue issued a warning that if Bitcoin were to drop below the $60,000 mark, it could set off a cascade towards the $50,000-$55,000 range, or potentially even down to $47,000 if forced liquidations ensue. The disparity between short-term recoveries and the broader medium-term trend remains significant, and Bitcoin’s rejection at the $70,000 threshold did little to bridge that gap.
