Bitcoin price dips below $42,000 as sell pressure mounts

Quick Take

  • Bitcoin slips below the $42,000 mark as sell pressure on the digital asset increases.
  • Market volatility over the past 24 hours has caused a spike in bitcoin long liquidations.

The price of bitcoin has slipped lower over the past 24 hours, pulling back below the $42,000 mark as sell pressure increases. The world's largest cryptocurrency by market capitalization fell 3% over the past 24 hours to $41,998 at 1:00 p.m. ET, according to The Block data.

Bitcoin BTC +0.96% 's retracement follows a rise in factors contributing to sell pressure on the digital asset, particularly among the short-term holder cohort.

According to CryptoQuant data, more than 25,000 bitcoins have been transferred from cold wallets to exchanges in the last 24 hours. The movement contributes to the liquid supply of the asset, thereby influencing price dynamics.

Bitcoin's circulating supply in profit has moved closer to a yearly high of just over 90%, with the current measure according the The Block's Data Dashboard at 89.4%. Also, data from The Block shows an uptick in transaction activity among the short-term holder cohort, those who have held the digital asset for 90 days or less.

Bitcoin network transactions spike

Transactions on the bitcoin network, meanwhile, have reached an all-time high. According to data from The Block, the number of transactions on the bitcoin network reached an all-time high of 633,000. Daily trading volume on the bitcoin network now stands at over $28 billion.

THE SCOOP

Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

This is a retracement from a mid-December yearly high of over $38 billion, but still almost twice the trading volume seen throughout November and October of this year.

The recent volatility in the bitcoin market has caused the liquidation of over $44 million in leveraged positions. According to data from Coinglass, the vast majority of these liquidations have been shorts, with over $38 million wiped out in the past 24 hours, compared to only around $6 million in long positions.

Approval of spot bitcoin ETFs

Year-to-date gains for bitcoin are currently above 155%. The digital asset's gains have been mostly fueled by optimism that the Securities Exchange Commission is getting ready to approve one or more of the spot bitcoin ETF applications that have been filed with the regulatory body. More than a dozen firms including BlackRock, WisdomTree and Valkyrie are waiting for the green light from the SEC.

Analysts anticipate spot bitcoin ETFs being approved in the first quarter of 2024. However, ETC Group Head of Research André Dragosch believes "the approvals will only lead to a short-term price spike at first."

"However, the capital entering bitcoin gradually, over time will double the price of the digital asset in 2024," Dragosch added.


Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Brian McGleenon is a UK-based markets reporter for The Block. He has worked as a financial journalist and producer for multiple news outlets over the years, such as Fuji Television, The Independent, Yahoo Finance, The Evening Standard, and The Daily Express. Brian is also a screenwriter and producer with one feature film produced and one in development with Northern Ireland Screen. Apart from web3 and cryptocurrency developments, he is also interested in geopolitics, environmental issues, artificial intelligence, and longevity research. Get in touch via email [email protected].

Editor

To contact the editor of this story:
Nathan Crooks at
[email protected]