Bitcoin showed signs of bottoming in September, analysis from ARK Investment's Bitcoin Monthly report shows. The investment firm led by Cathie Wood releases monthly updates on the cryptocurrency space.
Last month, Bitcoin found resistance at its 200-week moving average of $23,500 and support above its investor cost basis of $19,000. And the price of BTC swung between the two key levels for most of the month. Long-term-holder supply for the world's largest cryptocurrency reached an all-time high of 13.7 million BTC, which is about 71.5% of its total outstanding supply.
Bullish Signs For Bitcoin
Bitcoin's short-term-holder cost basis fell below its long-term-holder cost basis for the first time since late 2018, which usually indicates a strong market bottom. It could be a sign of short-term holders capitulating, or aging into long-term holders as speculation declines, ARK says. And Bitcoin's on-chain activity suggests that holding behavior and network fundamentals are much stronger than the current price suggests.
However, the Federal Reserve announced its third 75 basis point interest rate hike to try and curb inflation. A stronger U.S. dollar amid tightening policy negatively influences risk assets. And the uncertain macro environment will continue to weigh heavily on risk assets, including cryptocurrencies.
Regarding Ethereum's merge, ARK says it was a success and recent price action appears to be a "sell the news" event. Still, Ethereum could face greater regulatory scrutiny from the likes of the SEC, who may view staking as a mechanism rendering it a security.
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