Bitcoin and other cryptocurrencies were little changed Tuesday, struggling at relatively depressed levels after weeks of weakness amid signs of profit-taking across digital assets and few immediate catalysts to prop up prices.
The price of Bitcoin has fallen 1% over the past 24 hours to $61,700, remaining far below its 50-day moving average near $67,000 — a sign of technical market weakness. Bitcoin notched its fourth straight week of declines last Friday, with prices languishing since mid-March, when the largest digital asset hit a record high near $74,000 amid a wave of investor demand from new spot Bitcoin exchange-traded funds (ETFs).
"The recent downtrend can be attributed to increased profit-taking by investors who entered the market during the downturns of 2022 and 2023, as well as ETF investors who witnessed significant price appreciation on their shares after entering the market in the early weeks of 2024," said Matteo Greco, an analyst at digital asset investment group Fineqia International.
Indeed, while spot Bitcoin ETFs — approved by U.S. regulators in January — have been a driving force behind Bitcoin's gain of almost 50% this year, these funds also look responsible for the recent stagnation. Bitcoin ETFs have seen a short-term trend of waning demand and outflows, Greco noted, in addition to a significant fall in trading activity for the ETF shares themselves.
That said, crypto bulls remain optimistic that Bitcoin has more room to run, at least in the medium term, as a result of the so-called halving event that took place two weeks ago. This once-in-four-years change to Bitcoin's programmatic monetary policy cut issuance of tokens in half, restricting new supply and promising to boost prices as long as demand holds at least relatively steady.
"The current market trends are consistent with historical cycles, as the recent halving event has led to short-term downward price movements, a pattern observed in previous occurrences," said Greco. "Following this, there is typically a 9--12-month period of upward momentum, leading to the peak of the market cycle. If history repeats itself, we may see the current market cycle reaching its peak between Q4 2024 and the first half of 2025."
More immediately, cryptos are likely to move amid catalysts that could shift the S&P 500 and stock market this week, namely a barrage of corporate earnings, a decision on interest rates from the Federal Reserve, and economic data including the U.S. jobs report for April on Friday.
Beyond Bitcoin, Ether — the second-largest crypto by market cap — lost 4% to $3,050. Smaller tokens exhibited more of the same, with Solana sliding 4% and Ripple retreating 1%. Memecoins were more mixed, with Dogecoin down 1% and Shiba Inu advancing 1%.