Bitcoin Consolidates Above Key Levels After Record Weekly Gain Amid Profit-Taking

Bitcoin Consolidates Above Key Levels After Record Weekly Gain Amid Profit-Taking

Crypto News:

After a significant surge in digital asset prices in mid-March, trading activity has slowed down as investors take profits, leading to range consolidation.

According to reports, Bitcoin rose by 26% between March 13 and March 20, reaching $28,400, which was the largest weekly gain since December 2020.

The shift in capital towards crypto from traditional assets amid concerns over inflationary pressures and banking sector stability was one of the reasons behind this surge.

However, the CFTC’s lawsuit against Binance over trading and derivatives allegations created some skepticism among traders. Nevertheless, the range established since March 17 remains intact, with Bitcoin consolidating above the $26,900 level.

Glassnode’s on-chain metrics suggest that there has been an increase in the volume of coins deposited to exchanges, indicating a willingness to realize some profits, with most selling pressure coming from short-term holders.

Furthermore, Glassnode’s measure of Bitcoin network utilization relative to its 14-year history, liveliness, shows the ratio of Coin Days Destroyed (CDD) to Coin Days Created (CDC) at its lowest point since November 29, 2020.

According to Sam Holman, an analyst at Australian trading firm Zerocap, Bitcoin tends to be battle-tested against such stories in the long run.

Holman suggests that if there is an easing in the emergency loans from the Fed, we may start to see some weakness in Bitcoin.

Charles Edwards, founder of digital asset hedge fund Capriole, adds that the narrative surrounding Bitcoin’s price surge, largely related to the banking sector, would need to change for this trend to reverse.

In conclusion, despite profit-taking, Bitcoin has managed to consolidate above key levels, suggesting strong investor sentiment. However, traders are keeping an eye on regulatory developments and macroeconomic factors, such as Fed policy, that could impact the asset’s price in the long term.

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