U.Today – , the largest cryptocurrency by market capitalization, surged to new yearly highs before pulling back to the weekly open. Bitcoin‘s rally appears to have hit resistance, with several indicators pointing to near-term exhaustion.
Bitcoin had hit a new yearly high of $45,000 last week before falling sharply for the third time in 2023.
Bitcoin plunged to a low on Dec. 11 after a stormy period that wiped out more than 11% of the largest digital currency and sparked predictions of more volatility as the year draws to a close.
The cryptocurrency has been falling since Saturday, marking its worst performance since mid-August. The drop from nearly $45,000 also weighed on larger crypto markets.
Some analysts blamed worried speculators hedging their bets ahead of the Federal Reserve’s latest monetary policy meeting.
However, most analysts were unable to pinpoint a specific cause, describing the pullback as an expected correction given bitcoin’s 152% year-to-date gain.
According to , the recent price correction occurred as short-term holders of bitcoin took profits in statistically significant amounts, halting the rise. This comes after a period of rapid price growth in recent months.
Here’s the positive
notes that holding remains the preferred market dynamic among bitcoin investors, with mature portions of supply remaining largely dormant.
The on-chain analytics firm notes a recent increase in the number of addresses holding over 1,000 BTC, or bitcoin whales.
An increase in whale addresses indicates that larger bitcoin investors are becoming more confident. The increase in whale addresses is related to changes in the price of bitcoin, although not necessarily in direct proportion.
The accumulation of Bitcoin by whales is beneficial because it can affect market liquidity and volatility.
