- Major cryptocurrencies fell after strong gains earlier this week, with Bitcoin retreating from its all-time high.
- Bitcoin’s technical indicators suggest overbought conditions as the relative strength index remains elevated.
- Spot Bitcoin exchange-traded funds (ETFs) experienced outflows following a prior streak of inflows.
- Gold surpassed $4,000 per ounce for the first time, with investors seeking alternatives amid currency uncertainty.
- External factors and official support remain favorable for cryptocurrencies, including recent remarks by a U.S. Senator on a national Bitcoin reserve.
On Wednesday, prices for major cryptocurrencies declined after notable rallies earlier in the week, coinciding with a rise in the U.S. dollar. Bitcoin prices dropped to $121,336 after reaching a record high of $126,198. Ethereum fell sharply to $4,440, while XRP held steady at $2.85. Other tokens such as Solana and Cardano also moved lower. Binance Coin (BNB), which recently became the third-largest cryptocurrency by market value, pulled back to $1,283.
According to market data, Bitcoin’s relative strength index (RSI), a momentum indicator measuring price changes, stayed around 72. An RSI above 70 typically signals that an asset is “overbought,” which can often lead to price pullbacks due to profit-taking. On Tuesday, spot Bitcoin ETFs recorded $23.8 million in outflows, ending a six-day streak of inflows.
Shares of Michael Saylor’s Strategy, known for pioneering crypto treasuries, dropped 8.7% as Bitcoin fell. Investor sentiment on trading platforms remained “bullish” for the stock and “extremely bullish” toward Bitcoin, according to available data.
While major digital assets paused, gold prices rose above $4,000 per ounce for the first time, despite gains in the U.S. dollar. Both cryptocurrencies and precious metals have advanced in recent days, partly due to the “debasement trade,” where investors move to alternatives amid uncertainty regarding bonds and currency values.
Mark Moss, Chief Bitcoin Strategist at Satsuma Technology, stated that conditions remain positive for Bitcoin. Moss noted, “Bitcoin is breaking out to new ATHs, and yet it’s not looking anywhere near cycle peaks while external fundamentals are looking hot. Unlike 2021, the Fed is not tightening; they are loosening, ETFs and BTCTCs (Bitcoin Treasury Companies) are creating the greatest demand shock, and the world has woken up to the debasement trade.”
U.S. Senator Cynthia Lummis commented earlier this week that raising funds for the national Bitcoin reserve could “start anytime,” indicating ongoing support at the federal level.
For further market movement on precious metals, see: Gold Breaks $4K For First Time As Political Uncertainty Mounts: Analyst Sees FOMO Driving Inflows.
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