Bitcoin loses 11% after hitting new record, but interest remains, analysts say

Even with the correction, bitcoin has managed to stay above $60,000, a resistance level analysts say shows interest remains high

by Casey Wagner /

March 5, 2024 04:05 pm

Jolygon/Shutterstock modified by Blockworks

Bitcoin dipped more than 11% Tuesday afternoon in New York after surging earlier in the day to a new record-high price of around $69,170. It’s the first time the largest cryptocurrency has broken an all-time high in 27 months.

Even with the correction, bitcoin (BTC) has managed to stay above $60,000, a resistance level analysts say shows interest remains high.

“If previous non-crypto-related ETFs can teach us anything, it is that real growth after an ETF approval can be a multi-year process,” Chainlink co-founder Sergey Nazarov told Blockworks. “After waiting almost a decade for this ETF, I’d be surprised if this core group of holders would choose to relinquish their coins right as Wall Street finally decides to legitimize the space.”

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Ether (ETH) also spiked Tuesday, hitting an intraday high of around $3,816, about 22% below its all-time high set in November 2021. Ether pared gains later in the day, losing as much as 13% to trade around $3,400.

“Active trader positioning in bitcoin now appears fairly long,” Zach Pandl, head of research at Grayscale, said. “Valuations for ether and most other tokens remain below their highs from the previous crypto cycle.”

While most analysts agree a mild dip is expected after a peak, a combination of headwinds – including bitcoin’s upcoming halving cycle and ongoing elevated interest rates in the US – could position bitcoin for a lasting run, Pandl added.

“It’s fairly obvious [bitcoin’s] price run is driven by new money coming into the market, aided by new and convenient on-ramps,” Noelle Acheson, author of the Crypto is Macro Now newsletter, said. “But that’s only part of the story.”

Bitcoin is increasingly being used as a hedge against inflation, Acheson said, plus the newly-approved spot bitcoin ETFs provide an accessible on-ramp.

“We are seeing exactly what happens when the market has safe, secure and compliant access to the asset class — and institutions are just getting started,” Nathan McCauley, CEO and co-founder of Anchorage Digital, said.

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