Bitcoin is HODLing On

Market picture

Bitcoin made a fresh attack on the 25,000 level on Thursday but failed to hold higher, followed by a local sell-off. The pressure on the first cryptocurrency can be attributed to the situation in traditional markets, where the pull towards defensive assets has increased due to inflation data and comments from Fed officials.

Cryptocurrency investors are reversing the decline below $23.5K, where January's local highs are located.

The short-term technical picture gives the bulls a chance, suggesting a mini correction as part of a new upward wave. However, a daily or weekend consolidation could be a harbinger of a more profound decline, forcing a renewed focus on the still bearish picture in the longer term, where the price remains below the popular 50 and 200-week moving averages.

Background to the news

Wave Financial suggested that investors had stepped up after the Securities and Exchange Commission (SEC) failed to hit other stackable coins. Only Binance USD (BUSD), which saw its capitalisation plummet following Paxos' decision to suspend digital asset issuance, has been hit by the SEC.

The latest move by US regulators against cryptocurrencies is "a planned product liquidation" and could destroy a growing market, said Compound Labs founder Robert Leshner.

Galaxy Digital Holdings CEO Michael Novogratz suggested that bitcoin could hit $30,000 by the end of March. Given the movement of BTC, the excitement of traders and the growing FOMO syndrome, he said he would not be surprised if the first cryptocurrency traded above that mark by the end of the quarter.

According to Chainalysis, 2022 saw the highest number of hacking attacks in the cryptocurrency industry. In total, cryptocurrency companies lost $3.8 billion.

About the author

Alex Kuptsikevich is a financial market professional with 16-years’ experience and a senior financial analyst at FxPro. He is the author of daily reviews on the impact of economic events with comments featured in top international and Russian media. Alex covers fundamental analysis, global markets, the foreign exchange market, gold, oil, and cryptocurrencies in his analytical pieces. As the senior financial analyst at FxPro, Alex is a guest expert in 1-tier global media such as Forbes, Coindesk, Euromoney and Morning Star.