Bitcoin, Ethereum, Dogecoin Witness Pullback After Strong Rally: Analyst Says Stablecoin Growth Key To Bitcoin Hitting New All-Time Highs

Leading cryptocurrencies witnessed a correction Thursday, even as the Senate followed the House in passing a pro-crypto legislation. 

What Happened: Bitcoin gave some of its gains clocked during the relief rally the previous day as it sank below %66,000. The second-largest cryptocurrency, Ethereum, also fell below the $3,000 zone.

The pullback caused $119 million worth of futures positions to be wiped out in the last 24 hours, with long liquidations accounting for $83 million. Bitcoin led the pack with more than $31 million in liquidations.

The drop also led to an increase in traders betting on Bitcoin’s price decline vis à vis those bullish on the crypto, as evidenced by a drop in Longs/Shorts Ratio.

On an otherwise good day for the industry, the U.S. Senate passed legislation overturning SEC’s controversial rule preventing highly regulated financial firms from custodying Bitcoin, a week after the House of Representatives voted in favor. 

The market may be reacting to the potential of President Joe Biden vetoing the resolution, as he previously threatened. 

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The global cryptocurrency market cap fell 1.57% to $2.36 trillion over the past 24 hours.

Stocks closed lower Thursday, even though some blue-chip indices briefly rose to their all-time highs . The Dow Jones Industrial Average fell 38.62 points, or 0.10%, to close at 39,869.38, after crossing 40,000 for the first time earlier in the day. The S&P 500 ended at 5,297.10, following losses of 0.21%. The tech-heavy Nasdaq Composite dropped by 44.07 points, or 0.26%, to finish at 16,698.32.

Earlier in the day, Richmond Federal Reserve Tom Barkin told CNBC that though the inflation data has been encouraging, it”ll take a bit more time to align with the central bank’s goal of 2% inflation.

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Analyst Notes: On-chain analytics firm Santiment remarked that the rise in stablecoin market caps could validate the possibility of a sustained uptrend in the market.

“Pay attention to which direction these marketcaps go from here, as they will likely help foreshadow whether Bitcoin pushes toward a new AllTimeHigh or takes another lap below $60K,” Santiment informed

Well-followed analyst, Kevin, noted that with Bitcoin’s rise, altcoin holders have started to rotate capital into the King Crypto.

“This is very very bullish overall as it provides evidence to us that we’re entering into stage 3 of the bull market. Still need more data but looking really good right now,” the analyst stated.

Photo by Avi Rozen on Shutterstock

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