Bitcoin price collapsed by $ 52,000 in a short period of time but could not last long, falling
Bitcoin price remains near $ 50,000 after briefly topping $ 52,000 yesterday. At the time of writing, BTC is changing hands at $ 49,667.
BTC / USD 4-hour chart | Source: TradingView
The market is volatile, as is the price of Bitcoin
Trading activities are mostly subdued, as the trading volume of the No. 1 cryptocurrency by market capitalization on the major centralized exchanges is only slightly higher than on Sunday. The low volume bitcoin rally comes as US stocks also rise in a week that has traditionally been characterized by light but bullish trading.
At the end of the year, the market hits an all-time high in what is known as government Bitcoin supply – the total amount held outside of foreign exchange reserves. The growth in the government supply of Bitcoin is due to the fact that the proportion of long-term holders has increased by 4.8%, reaching 74.8% of the total government supply last year. Short-term holder ownership of Bitcoin has decreased from 28% in January to 25.2% now.
In terms of market reversals, that certainly doesn’t help as several crypto market indicators show signs of overbought activity during the month that led to Bitcoin’s April high. For example, the Alternate.me Crypto Fear & Greed Index reached its highest level since June 2019 around March, preceded by a sell-off of almost 60% of the BTC price. At the time of writing, the index changes hands on 41, “Anxiety”.
Crypto Fear & Greed Index as of December 28 | Source: Option.me
Price movements are much less volatile than they have been in recent months, and it seems that many investors still believe in Bitcoin’s potential as a long-term store of value. Bitcoin miners claim they are trying to minimize or minimize their environmental impact, and most of the network’s mining power has moved away from crypto-friendly China.
One key takeaway is that despite a suddenly unstoppable onslaught of negative headlines for the Bitcoin market, the price has still risen significantly on a historical basis: Bitcoin’s all-time high in April was around $ 65,000, which is now far away, but the low in 2020 is around $ 3,850.
Elsewhere, ETH fell slightly above the $ 4,000 mark. At press time, it is trading at $ 3,943. The altcoin market has rallied unevenly today. The total capitalization of the crypto market is $ 2.329 trillion and bitcoin dominance is 40.3%.