The cryptocurrency markets have a love-hate relationship with unexpected news events, a fact writ large in bitcoin’s response to Binance boss Changpeng ‘CZ’ Zhao’s totally unexpected departure from the world’s most prominent cryptocurrency exchange on Tuesday.
CZ rescinded the role as part of a $4.3 billion settlement with US regulators over money laundering, bank fraud and sanctions violations charges.
Binance’s native BNB token plummeted more than 10% as a result, but losses were felt across the entire cryptocurrency market.
Benchmark cryptocurrency bitcoin plummeted more than 4.5% in response to the news in the worst trading session for the BTC/USDT pair in nearly three months.
Some buoyancy returned to the markets on Wednesday morning though, regaining 2% on lost ground. Bitcoin was swapping for $36,450 at the time of writing.
Bitcoin is over 37% higher over six months – Source: tradingview.com
Bitcoin’s rebound this morning may be an indicator of broader bullish trends despite short-term volatility.
Matteo Greco, research analyst at Fineqia International Inc (CSE:FNQ, OTC:FNQQF), noted that presently, about 80% of the addresses holding bitcoin are in profit, “illustrating the robust accumulation during the 2022 downturn”.
Only roughly 20% of addresses have an average purchase price exceeding $37,000, “affirming the high probability of a bottom being formed during 2022”, he stated.
“This accumulation by long-term holders from short-term holders is typical in the latter stage of a bear market, where cycle bottoms are established. This is further supported by the BTC supply that has not moved in the last 12 months, currently accounting for 70.2%, indicative of the long-term commitment of most investors.”
In another bullish sign, Greco also stated that the 'Bitcoin Illiquid Supply metric', measuring the supply held in wallets with minimal spending history, has reached an all-time high of 15.4 million BTC.
Ethereum (ETH) experienced a similar dip and recovery to bitcoin, having fallen off 4.4% on Tuesday before regaining 3.4% this morning.
At the time of writing, the ETH/UDST pair was changing hands at $1,998.
In the broader altcoin space, Cardano (ADA), Dogecoin (DOGE), Toncoin (TON) and Avalanche (AVAX) remain in the week-on-week green, while Solana (SOL) and Tron (TRX) have fallen into the red zone.
Global cryptocurrency market capitalisation currently stands at $1.38 trillion, with bitcoin dominance at 52.65%.
Read more on Proactive Investors AU
