Bitcoin in choppy waters after failing to break through

Bitcoin traded above $59K levels on Saturday morning after being probed earlier in the week and failing to break through the resistance level at about $62K.

Though SEC gave its green light on MicroStrategy leveraged ETF this week, which might expand investor exposure to Bitcoin, while Marathon Digital increased its holdings of 4,141 BTC, contributed to a resumption of the risk-on mentality in the markets.

However, the false information spread by traders on Mt. Gox and US government fund transfers kept Bitcoin from benefiting from these advancements. Although Bitcoin looks to be finishing the workweek largely unaltered, on-chain data shows that the negative bias is still present and suggests a gloomy trend for the cryptocurrency in the days ahead.

The price action of Bitcoin shows its recent movements are similar to those observed in past election years in the United States, and its recent lack of momentum may be greatly reversed.

The recent protracted consolidation of BTC followed by a decline, which saw the cryptocurrency drop below $50,000 at the start of August, is reminiscent of trends observed before US presidential elections in 2012, 2016, and 2020.

The funding rate for Bitcoin fell to minus 7% on Thursday—the lowest amount in the previous 365 days. A negative financing rate lends credence to a Bitcoin gain thesis by showing that holders of short positions are paying long holders.

According to Glassnode data, long-term investors’ holdings in bitcoin reached all-time highs. Long-term holders contributed 284,740 Bitcoins to their accounts between July 18 and August 14. The number of long-term Bitcoin owners rose from 13,538 million to 13,823 million. Election Day for the US presidential contest, is set for November 5. Some traders, meanwhile, think there might be more downside below its present range.

ABOUT THE AUTHOR See More

Olumide Adesina

Financial Market Writer

Olumide Adesina is a French-born Nigerian financial writer. He tracks, analyzes, and reports changes in financial markets with over 15 years of working experience in investment trading.

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