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Bitcoin plunged to $27,300 as its rally above $28,000 proved to be short-lived.
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BTC is in a bull market for defies market rout in equity and U.S. Treasury bond trading, ByteTree CIO says.
Bitcoin (BTC) briefly surged above $28,000 during Thursday U.S. morning hours, then dropped to as low as $27,300 as traders took the opportunity to sell the rally.
The largest cryptocurrency by market capitalization was changing hands at $27,500 recently, flat over the past 24 hours, but still outperforming the wider crypto market. The CoinDesk Market Index (CMI), which features a broad basket of digital assets, was down 0.3%, while ether (ETH) slid 1.8% over the same period.
“In the near term, I expect the market to sell into this rally,” John Glover, chief investment officer of Ledn, told CoinDesk in an email. “In the absence of new capital flowing into digital assets, I believe that this is what this rally will be: short-lived.”
Glover expects a more durable appreciation will materialize later this year and early next year as bitcoin appears to be finished with its corrective move. “I do believe that BTC prices will be higher in three months than they are today as technically we’ve completed the sell off and I now look for a sustained rally into Q2 2024,” he said.
Bitcoin as safe haven from surging rates
Investment research firm ByteTree upgraded its BTC market signal from neutral to bull in a report on Thursday. The crypto’s recent price action has defied a rough period for traditional financial markets, offering a safe haven from a rout in equity and bond trading.
“Bitcoin futures look good, especially when you compare them to the crisis in the bond market,” Charlie Morris, chief investment officer of ByteTree, said in the report. “It is the true safe haven from Uncle Sam’s bonds.”
He pointed out that BTC is beating the U.S. stock market at a time when surging bond yields wreak havoc on traditional markets. When interest rates peak and the bond sell-off ends, BTC will be “off to the races,” he said.
Morris noted that during BTC’s latest corrective move, the crypto held above the key $25,000 level, which capped the price between May 2022 and March 2023.” If we can hold that $25,000 level, which we probably will, BTC is very much in a bull market, albeit a quiet one,” he said.
Even if BTC is shaking off rising yields, it has remained “trapped in its $26,000 to $30,000 cage,” according to Edward Moya, senior market analyst of the Americas at forex trading firm Oanda.
“What is also preventing crypto investors from becoming more optimistic is that the bond market sell-off refuses to end and that will cripple many crypto startups,” he added.