Bitcoin Bulls Back in Control as Market Correction Seems Like Old News
Bitcoin (BTC) rose, clawing past $50,000 amid fresh signs of bullishness in the cryptocurrency industry, with blockchain data showing some big investors moving to hoard for the long term. Meanwhile, the U.S. exchange Coinbase filed financial disclosures that could be one of the final steps before a public stock listing.
The largest cryptocurrency gained for the second straight day, easing concern that a big sell-off earlier this week might have further to go. Prices fell 15% on Monday and Tuesday, the biggest two-day correction in 11 months, and some analysts were quick to warn of the potential for a drop as low as $40,000.
“We believe the recent sell-off puts the market on sounder footing,” David Grider, director of digital asset strategy for FundStrat, wrote in a weekly report.
Related: UK Must Act Quickly to Ensure Fintech Lead, Encourage Crypto: Treasury Report Urges
Bitcoin was changing hands at $49,472 at press time, up 1.95% over the past 24 hours, according to the CoinDesk Bitcoin Price Index.
The No. 1 cryptocurrency’s price went as high as $52,076.32 in the past 24 hours, after more than 13,000 BTC, worth roughly $650 million, were moved out of institution-focused Coinbase Pro exchange Wednesday afternoon. This move is usually a bullish sign for the markets, reflecting institutional investors’ support to bitcoin’s long-term value, as they move their bitcoin to custody wallets.
Read More: Bitcoin Outflows From Coinbase Suggest Institutions Are Buying the Dip
The regulatory filing by Coinbase also appeared to trigger a brief additional price pop of about $1,500, though some of those gains later reversed.
Related: Coinbase Calls Out Binance as It Bemoans Compliance Burden
The Coinbase filing represents “another positive move forward for our industry,” Matt Blom, of the publicly traded cryptocurrency exchange firm EQUOS, wrote Thursday in his daily newsletter.
“The onus is on the bears,” Blom wrote. “Failure to attack the market now is a clear sign that we will move back toward our all-time high.”
U.S. stocks opened lower on Thursday, as investors worried about a recent rise in 10-year U.S. Treasury yields. Some analysts in traditional markets have predicted that rising yields, often a precursor of inflation, might prompt the Federal Reserve to tighten monetary policy, which could send stocks lower. The potential impact of the surging bond yields on bitcoin, though, is still under debate among analysts and investors in crypto markets.
“It seems much of the narrative around the market, both crypto and traditional, have started to revolve around the inflation narrative,” Andrew Tu, an executive at quantitative trading firm Efficient Frontier, said. Rising bond yields “could mean that the market could go into more of a risk-off mode on equities. On the other hand, it is possible that the inflation narrative actually benefits bitcoin, as well as other commodities and real assets.”
“Regardless of whether inflation actually materializes or not, the fact bitcoin today has surged at all highlights the market is beginning to understand, and buy into, the value proposition,” Artur Sapek, general manager at Kraken-owned crypto trading platform Cryptowatch.
