Factors Preventing the Deepening of BTC Price Decline - COINTURK NEWS
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Factors Preventing the Deepening of BTC Price Decline

7:36 pm (78 days ago)
September 23, 2023

The Federal Reserve’s implication at the meeting on September 20 that interest rates could remain at high levels for a longer period of time without rising affected not only the global markets but also the cryptocurrency market. Following this implication, the stock index S&P 500 fell by more than 2% and Nasdaq dropped by about 3%. On the other hand, despite the downward direction of Bitcoin‘s (BTC) price, it managed to hold around $26,600, the same price level as last week, and demonstrate relative strength by performing better in the past 30 days. Chain analysis company IntoTheBlock highlighted Bitcoin’s recent superior performance compared to the stock market in a recent blog post.

Factors that Prevent the Deepening of BTC Price Decline

Bitcoin and major altcoins continuing to stay above important support levels remain an encouraging sign. IntoTheBlock pointed out some important factors that could explain Bitcoin’s relative strength in price decline. The first of these factors is the correlation of the largest cryptocurrency with the US dollar approaching zero despite the rise of DXY. The second factor indicates that Bitcoin investors are avoiding selling for now in anticipation of the approval of a spot Bitcoin ETF.

IntoTheBlock pointed out the third factor, which is the one-year delay in the repayment of the compensation, amounting to 850,000 BTC or $23 billion, that Mt. Gox, once the largest Bitcoin exchange, plans to pay to its users affected by the hack incident. Thus, the strong selling pressure expected to come from next month onwards has been postponed.

The fourth factor among the listed factors is the increasing dominance of Bitcoin in the industry. In this context, Bitcoin’s market share has surpassed 50% for the second time this year, increasing in recent weeks.

The fifth factor is the ratio of Bitcoin’s market value to Ethereum‘s (ETH) market value, which reached its highest level of the year at 2.68x this week. IntoTheBlock showed HODLers’ calmness as the sixth factor behind Bitcoin’s stable price movement.

The Effective Role of Bitcoin HODLers in Price Stability

HODLers, or wallet addresses that have been holding Bitcoin for more than a year, continue to accumulate without selling BTC, just as they did in previous weak markets, even in the current weak market environment. IntoTheBlock pointed out that despite the recent price decline, the total amount of BTC held by HODLers continues to remain near record levels, reaching 13.33 million or 69% of the circulating BTC supply.

Although it is uncertain how long Bitcoin’s superior performance will last in the deteriorating macro environment, IntoTheBlock highlighted that with these reasons, the trend could potentially indicate an upcoming bullish cycle for Bitcoin.

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