Bitcoin’s recent attempt to climb back towards its all-time peak faced strong resistance and reversed direction during Thursday’s U.S. trading session.
Shortly before the stock market opened, Bitcoin was hovering just below $124,000, but it quickly retreated to under $121,000 within approximately an hour and a half. This downturn occurred alongside similar pullbacks in the previously high-performing gold and silver markets.
While gold has been dominating headlines recently, the action in the silver market may have been a key factor today. Silver prices surged by 50% from their April lows, reaching $50 per ounce for the first time on Thursday. However, this milestone triggered rapid profit-taking, causing the price to plummet by around 4% within minutes. At the time of this report, silver was trading at $48.55.
“In the short term, market momentum seems unstable as technical indicators suggest an overbought condition. However, in the medium term, the desire to maintain price levels above $50 should persist if the overall economic situation and real-yield environment remain favorable,” commented Daniela Sabin Hathorn, a senior market analyst at Capital.com.
Gold, meanwhile, experienced a reversal of over 1%, declining from a test of the $4,100 per ounce level to its current price of $4,035.
The ongoing U.S. government shutdown may also be contributing to investor unease, as it disrupts the release of vital economic data and hampers the operations of businesses that depend on federal services, thus casting uncertainty over both traditional and digital asset markets.
Altcoins Suffer Against Bitcoin
Smaller cryptocurrencies experienced sharper declines during this pullback. Ether dropped by 3.5% to $4,300, while BNB and DOGE also saw losses in the range of 3%-4%.
Amidst this shift towards risk aversion, Bitcoin’s dominance in the overall cryptocurrency market reached its highest point in almost eight weeks. Data from TradingView indicates that the Bitcoin Dominance metric climbed above 59.4% for the first time since August, suggesting that traders are shifting capital back into the leading cryptocurrency.
The market correction also extended to crypto derivatives, resulting in over $600 million in leveraged trading positions being liquidated across all digital assets within the past 24 hours, as reported by CoinGlass data.