Bitcoin: Holding Strong Amid Market Volatility

It has been roughly five months since Bitcoin marked a new all-time high just below the $74,000 mark. However, following this peak, the bulls lost momentum, leading the cryptocurrency into a volatile sideways trend. Despite this, most Bitcoin holders seem confident that the rally will continue.

According to recent data from the analytics platform Glassnode, 74% of all mined Bitcoin has remained untouched for at least six months. Even though the price has dropped by about a third from its record high and is currently trading approximately 21% below that level, the majority of investors are holding onto their coins.

The fact that so many Bitcoin are currently in strong hands means, conversely, that fewer units are available for short-term trading. This already limited supply is further reduced, making Bitcoin even scarcer. If demand remains steady or continues to rise, this could be a positive signal for the digital currency’s price trajectory.

Despite the limited supply, the active trading of the remaining 26%—approximately 5.13 million Bitcoin—has still contributed to significant price fluctuations. At the beginning of the month, Bitcoin briefly dipped to $49,121, its lowest point since late February. It then quickly recovered, attempting to stabilize around the $60,000 mark.

This recovery can be attributed to an overall improvement in market conditions, following recent concerns about a recession and stock market turbulence, which also impacted cryptocurrencies. However, the primary driver for Bitcoin and other cryptocurrencies in the near term is likely to remain the macroeconomic environment, particularly the question of if and when the U.S. Federal Reserve (Fed) will proceed with the much-anticipated interest rate cuts.

In contrast, news from within the crypto industry itself has been scarce recently. Despite a notable recovery from the low at the beginning of the month, market sentiment remains tense. The Fear & Greed Index for the crypto market still signals “Fear” with a score of 28.

Given this backdrop, the fact that the majority of Bitcoin is still being held is a strong signal, fostering hopes for further increases in Bitcoin prices in the future. Even the financial magazine DER AKTIONÄR advises investors to stay the course. Pullbacks like the current one may present opportunities for long-term investors to buy more Bitcoin.