The world’s largest cryptocurrency by market capitalization is down 2% on the day after reaching a 24-hour high of around $45,986, CoinDesk data show. At press time, bitcoin was changing hands at around $44,400.
Bitcoin has fallen squarely back below its 200-day moving average, invalidating a breakout on Aug. 13.
“We still have support at $44,000 and $42,000, which is the line in the sand for short-term momentum,” Jon de Wet, chief investment officer at digital asset firm Zerocap, told CoinDesk via Telegram.
The firm pointed toward flows to safe-haven assets in light of the instability in Afghanistan that was sparked by the exit of the U.S. military as well as concerns over the COVID-19 Delta variant.
Headwinds in China, with its slowing economy and tech sector crackdown, are also affecting the crypto markets, but so far, the Liquid hack having little impact. That’s a sign of continuing bullish sentiment, the firm noted.
“A daily break below $42,000 would place some confidence in the bears, but on balance, we believe [the] price will hold above this level over the coming week,” de Wet said.
On-chain indicators point to bitcoin holding above that level, at least in the short-term, as so-called smart money flows out of exchanges continue to reign supreme, Glassnode data show.
Generally, “smart money” dominates exchange flows, according to Zerocap. If bitcoin is leaving exchanges, it can indicate an intention to hold. Conversely, when bitcoin moves onto exchanges, it can indicate an intention to sell.
“Ethereum even more so, with exchange balances hitting an all-time low this week,” de Wet said. “Leverage is not excessive in this market right now – all very supportive of a buoyant week ahead, despite the macroeconomic landscape.”
Other notable cryptocurrencies in the top 20 by market cap were mixed on a 24-hour basis with cardano, terra and internet computer posting the highest gains, while uniswap, polygon and chainlink were deep in the red.