The cryptocurrency market experienced a decrease in activity on Thursday after a significant increase earlier in the week due to anticipation of a spot bitcoin ETF. Bitcoin (BTC) dropped by about 2% in the past 24 hours, settling just above $34,000, as investors took profits following its nearly 20% surge in the past week. Ether (ETH) remained steady around $1,790.
The CoinDesk Market Index (CMI), which tracks the performance of various digital assets, declined by 1.3% on Thursday. Chainlink (LINK) and adventure gold (AGLD) both saw declines of 5% and 9% respectively, as FTX wallets moved millions of tokens to Coinbase, potentially for selling. Additionally, Sam Bankman-Fried, the founder of FTX, was scheduled to testify at his criminal trial. Other notable decliners included Solana (SOL), Aave (AAVE), and Bitcoin Cash (BCH).
However, traders showed renewed interest in memecoins, with Dogecoin (DOGE) jumping nearly double-digits and Pepe (PEPE) gaining 6%. Shiba Inu (SHIB), another dog-themed token, also experienced a significant move but later gave back most of its gains. Meanwhile, equity markets continued their decline due to disappointing earnings reports, with the S&P 500 dropping 1.2% and the Nasdaq Composite Index declining 1.7%.
Despite the temporary slowdown, bitcoin is still in its fifth bull market, with the main narrative being its perceived safe haven properties. According to Matrixport, a crypto investment services firm, institutions are considering bitcoin for diversifying their asset allocation due to its characteristics that are traditionally associated with safe-haven investments like gold and Treasury bonds. Matrixport analysts maintain their $125,000 price target for bitcoin by the end of 2024.
Bloomberg analyst Jamie Coutts compared bitcoin’s recent price action to the breakout in July 2020, noting that the price has cleared a significant supply overhang, indicating a confirmation of the bull market regime.