Bitcoin Cools Off at $34K, But '5th Bull Market' Has Further to Run, Says Analyst

The crypto market cooled off Thursday after its sizable rally earlier this week spurred by spot bitcoin ETF anticipation.

Bitcoin (BTC) slipped about 2% over the past 24 hours to just above $34,000 as investors took profits following its near-20% jump over the past week. Ether (ETH) traded flat near $1,790.

The CoinDesk Market Index (CMI), which tracks the performance of a broad basket of digital assets, was down 1.3% on Thursday.

Chainlink (LINK) and adventure gold (AGLD) slumped 5% and 9%, respectively, as FTX wallets moved millions of worth of tokens to Coinbase potentially to sell, while Sam Bankman-Fried was due to testify at his criminal trial. Other sizable decliners included (SOL), (AAVE), and (BCH).

Perhaps buoyed by renewed animal spirits in crypto, traders rotated some of the proceedings into memecoins, with (DOGE) jumping nearly double-digits and (PEPE) gaining 6%, now roughly doubling its market capitalization in a week. Dog-themed token shiba inu (SHIB) also posted a sizable move but gave back most gains by late afternoon.

Equity markets extended their losing streak, dragged down by disappointing earnings reports. The S&P 500 dropped 1.2%, while the tech-heavy Nasdaq Composite Index declined 1.7%, per MarketWatch data.

Despite taking a breather, bitcoin is very much in its fifth bull market, and the leading narrative is its perceived safe haven properties, crypto investment services firm Matrixport said in a Thursday market update.

"The fifth bitcoin bull market appears to be primarily driven by the expectations of institutional adoption," the report said. "Bitcoin's characteristics, which were traditionally associated with assets like gold and other safe-haven investments such as Treasury bonds, have led institutions to consider Bitcoin for diversifying their asset allocation."

Matrixport analysts doubled down on their $125,000 price target for 2024 year-end.

Bloomberg analyst Jamie Coutts compared bitcoin’s recent price action to the July 2020 breakout from the $10,500 price level, which eventually led to new all-time highs.

"Price has cleared a massive supply overhang – the largest in its history," Coutts noted. "Whilst there will be pullbacks, as we saw in Q3 2020, price is confirming the bull market regime."