What an Increasingly Booming Economy Means for Bitcoin
Bitcoin (BTC) declined late Thursday after a brief test spike to $56,000. The cryptocurrency was trading around $52,600 at the time of writing.
The largest cryptocurrency is down about 10% for the month to date and is on track for the worst month since January.
Bitcoin retraced roughly 50% of the prior two-week sell-off, which ended at a low around $47,000. However, the recovery was short-lived as intraday charts showed resistance around $56,000.
BTC remains below the 50-day moving average on the daily chart, a sign of slowing momentum.
Ether (ETH) also declined, to $2,720, after reaching an all-time high around $2,790 on Thursday. The second-largest cryptocurrency by market cap is up about 13% over the past seven days while BTC is up only 1.75%.
“Alts (altcoins) are now enjoying the attention bitcoin has brought them. The real question is, if bitcoin breaks lower and heads back to $50,000, will the rest of the crypto market take a bath or will the dominance index head back to record lows?” Matt Blom, head of sales and trading for the digital-asset exchange firm Diginex, wrote Thursday in a newsletter.
Steve Ehrich, CEO of Voyager Digital, attributed at least part of the weakness to the bitcoin options expiry this Friday, saying, “Historically, we have seen prices drop in the days leading up to bitcoin options expiry only to rebound afterwards, confirming the continued bullishness around bitcoin.”