Bitcoin (BTC) has held firmly above the $26,000 level this week despite sharp sell-offs in equity markets and the surging U.S. dollar – a victory of sorts given the bearish signals those other moves could’ve portended.
The largest crypto asset by market capitalization changed hands Friday afternoon at around $26,500, slightly up 0.3% since the start of the week.
Meanwhile, the benchmark for U.S. stocks, the S&P 500, and the tech-heavy Nasdaq Composite Index plunged 2.7% and 3.2%, respectively.
IntoTheBlock said in a report that the steady price action was “remarkable” in light of the stock market taking a hit. The analytics firm noted among the potential reasons behind the stability that BTC’s correlation with the Dollar Index (DXY) hit zero, meaning there’s no relationship at all between them.
The number of long-term holders – HODLers in crypto slang – are near an all-time high, IntoTheBlock said, which could be a sign that they are refusing to sell before a potential approval of a spot BTC exchange-traded fund in the U.S.
“Historically, these long-term investors have helped sustain price during bear markets and take profits as new all-time highs are set in bull markets,” the report said.
“This trend appears to signal a bullish cycle for bitcoin may be approaching,” it added. “Though it’s unclear how long bitcoin’s outperformance will last in a worsening macro environment, on-chain data shows that its long-term investors continue to accumulate regardless.”
Resistance above $27,000
BTC climbed to as high as $27,400 ahead of the Federal Reserve meeting on Wednesday, but turned lower “witnessing strong selling pressure,” Rachel Lin, CEO of derivatives decentralized exchange SynFutures, noted in an email.
“Both the 200-weekly moving average and the 200-daily moving average are in the 27,800 level, likely acting as strong resistance in the coming week,” she said, adding that the range between $26,000 and $26,500 acts as a support for prices.
In the options market, $24,000 puts and $35,000 call options have the largest open interest, according to Lin.
“This suggests the market still believes BTC will stay in that range for the foreseeable future,” she said.