Bitcoin and other cryptocurrencies experienced a slight decline on Tuesday, although they remained at relatively high levels following a recent rally. Despite this decrease in speed, the overall market conditions suggest that there may be more gains on the horizon.
In the past 24 hours, the price of Bitcoin has dropped by less than 1%, falling below $34,700. This decline comes after reaching a peak of nearly $36,000 last week, marking the highest point for the token since the cryptocurrency market took a hit in May 2022. Bitcoin has made an impressive 30% rally in just a few weeks, breaking out of a lull characterized by historically low volatility and trading volumes.
Katie Stockton, managing partner at technical research firm Fairlead Strategies, observes that Bitcoin is likely to go through a period of consolidation in the days to come due to the loss of short-term upside momentum around the $35,900 resistance level. Despite this, the technical indicators still paint a positive picture for Bitcoin, and it could continue to outperform traditional stock market indices such as the Dow Jones Industrial Average and S&P 500.
In summary, while Bitcoin's rally has shown some signs of slowing down, there is still optimism regarding its future performance. The technical analysis suggests that more gains could be on the horizon, making it an asset to watch in the coming days.
Bullish Stance on Bitcoin
"We maintain an intermediate-term bullish stance, noting our weekly indicators point higher," said Stockton.
Potential Breakout and Resistance Levels
Should Bitcoin see another breakout, it would put the next resistance near $42,200.
Crypto-Native and Macroeconomic Catalysts
Beyond the technical backdrop, both crypto-native and macroeconomic catalysts continue to buoy token prices.
Optimism for Bitcoin ETF Approval
Bulls remain optimistic that U.S. regulators will approve the first spot Bitcoin exchange-traded fund (ETF). This approval is expected to usher in a fresh wave of investor interest in digital assets.
Geopolitical Risks and Bitcoin as "Digital Gold"
Geopolitical risks arising from conflicts in the Middle East have renewed calls for Bitcoin as a "digital gold" and a safe haven asset. Traders have shown signs of flocking to Bitcoin in times of uncertainty.
Expectations of No Further Interest Rate Hikes
The anticipation that the Federal Reserve will not have to raise interest rates any further has also boosted sentiment surrounding Bitcoin and other digital assets.
Performance of Other Cryptocurrencies
In addition to Bitcoin, Ether, the second-largest cryptocurrency, dropped 1% to $1,875. Smaller tokens were relatively muted, with Cardano down 2% but Polygon remaining above flat. Memecoins showed mixed results, with Dogecoin up 2% and Shiba Inu down less than 1%.
