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The upward momentum of Bitcoin (BTC), which had propelled it beyond the $30,000 mark, appears to have hit a temporary snag.
As per the CoinDesk data, the dominant cryptocurrency in terms of market capitalization was changing hands at approximately $29,500, down by 2.6% in the last 24 hours. The decline in Bitcoin's value began on Sunday and the price plummeted to $29,292 before experiencing a slight rebound.
Following last week's slightly optimistic inflation figures, investors pushed the price of bitcoin above $30,000, marking the first time since June of last year. However, the climb from $28,000 was "not thoroughly tested," noted Joe DiPasquale, the CEO of crypto-asset manager BitBull Capital, in an email to CoinDesk.
"Even though it breached $30,000, the price was likely to look for support on the downside and potentially consolidate before another leg up,” DiPasquale said, adding that with bitcoin recently sticking around mid-$29,000, most indicators on hourly time frames, such as the Relative Strength Index and Stochastic RSI, hint at a spike upward.
“What the bulls will want to see is a strong bounce from between the $28,000 and $29,000 range and a reclaim of $30,000 in the coming days," he said, although he also noted that bitcoin's price could decline to $23,000 before rebounding. In that case, “it may take longer for the upside to materialize," he said.
According to Coinglass data, traders who were speculating on price movements have closed over $32 million worth of long positions in BTC since Sunday evening, while only $1 million worth of short positions were closed. Such long squeezes typically lead to a decline in prices.
Riyad Carey, a research analyst at Kaiko, a crypto data company, suggested that various macroeconomic factors, such as the recent rise of the U.S. dollar and the inconsistent Q1 earnings reports, could be the reason behind the decline in bitcoin's price. According to Carey, there is a negative correlation between the U.S. Dollar Index and the price of bitcoin, although that correlation has weakened since the beginning of this year.
Elsewhere in markets
Ether (ETH) was trading at around $2,084 on Monday, experiencing a slight decline of 0.7% in the past 24 hours. Despite this, it remained stable after the significant software upgrade of the Ethereum blockchain last week. Meanwhile, Avalanche's AVAX token surged over 7% to reach $20.70, and dYdX's DYDX token, which focuses on perpetuals, rose by 5% and traded at over $3.
Over the last 24 hours, the CoinDesk Market Index (CMI), which provides an overview of the overall performance of the cryptocurrency market, has dropped by 2%.
Crypto-related stocks experienced a decline on Monday after experiencing a surge towards the end of last week. Shares of Coinbase (COIN) and bitcoin mining company Marathon Digital Holdings (MARA) fell by over 3%. Additionally, MicroStrategy (MSTR), a business software company that holds a significant amount of bitcoin, saw a 5% drop in its stock value.
Investors were anticipating earnings reports from major banks such as Bank of America (BAC) and Goldman Sachs (GS), resulting in mixed performance in the equity markets. The S&P 500 and the tech-focused Nasdaq experienced a decline of 0.1% and 0.2%, respectively, while the Dow Jones Industrial Average remained unchanged.
Source Coindesk
