Bitcoin (BTC) and the broader cryptocurrency market declined later on December 31, erasing intraday earnings to close a very successful year on a weaker note.
Market update
The price of BTC fell below $ 46,000 on December 31 and was last seen below that level, according to data from Cointelegraph Markets Pro Y TradingView. The flagship cryptocurrency is down more than 5% from its intraday peak and 2.9% on the day to trade at $ 45,933.
Altcoins faced a similar downward trajectory to Bitcoin, with the likes of Ether (ETH), Binance Currency (BNB) and Solana SUN each falling more than 2%. By Cardano THERE ARE decreased more than 4% on the day.
The combined market capitalization of all cryptocurrencies has returned over $ 100 billion since its intraday peak, falling from a high of $ 2.4 trillion to $ 2.27 trillion, according to CoinGecko.
The sudden reversal followed a modest relief rally for BTC and other cryptocurrencies that took place in early December 31st. As Cointelegraph reported, Bitcoin price appreciated by more than $ 1,500 in less than an hour, a rally that may have been helped by an option expiration event in December worth roughly $ 6 billion.
Related: Price Analysis 12/31: BTC, ETH, BNB, SOL, ADA, XRP, LUNA, AVAX, DOT, DOGE
Crypto OGs keep piling up
Bitcoin is bracing for an annual yield to date of less than 60%, which is well below what many, if not most, forecasters were asking for in early 2021. Although BTC never came close to achieving elevated valuations of six figures. , the leading cryptocurrency continues to attract investors with a low time preference. (Investors with a low time preference put more emphasis on their financial well-being in the distant future than they do today.)
BTC's recent price correction has been largely driven by so-called crypto tourists who entered the market in the summer. As Cointelegraph recently reported, veteran headlines still selling record amounts of BTC at the end of December. Meanwhile, purchase activity on Coinbase it appears to have rebounded substantially towards the end of the year.
Earlier this week, UTXO Management analyst Dylan LeClair said that "real OGs are holding their own," referring to long-term holders of Bitcoin having a much lower on-chain cost base than those who are selling. nowadays. The average on-chain cost base for long-term BTC holders is $ 17,825 compared to $ 33,890 for those currently spending their coins.
#Bitcoin Long-term holders have an average on-chain cost base of $ 17,825, but those currently on the go by spending their coins have a cost base of $ 33,890.
The true OGs stand their ground. pic.twitter.com/VtxuAcZzUw
- Dylan LeClair (@DylanLeClair_) December 30, 2021
Related: Top 5 Bitcoin Bullish Stories of 2021
In addition to the long-term retail class of hodlers, the crypto market saw an influx of sophisticated institutional investors in 2021. Net income from crypto funds exceeded $ 9.3 billion in 2021, with Bitcoin accounting for more than two-thirds of that. that total. according to CoinShares data. These funds recorded 16 consecutive weeks of inflows through December 13.
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