Bitcoin is holding near $78,000 as memecoins and small-cap tokens lead a broader crypto pullback, with derivatives traders turning bearish again ahead of this week's inflation and rate decisions. Coinbase CEO Brian Armstrong said he believes the asset has already bottomed for the current cycle.
Bitcoin traded at $77,803.62, down 0.23% since midnight UTC and 2% over 24 hours, according to CoinDesk Indices data. The decline wipes out Wednesday's advance and leaves the largest cryptocurrency 5.1% below the $82,284 high it reached last week.
Memecoins take the brunt of the selloff
Only five of the 100 CoinDesk 100 constituents are higher over 24 hours, and the index itself has dropped 3.7% over the period. The selling has concentrated in the speculative end: the CoinDesk Memecoin Index has fallen 10% over 24 hours, against 2.3% for the CoinDesk 5. Since midnight, though, the session has calmed, with the index down just 0.54%, suggesting the bulk of the damage was done overnight.
Futures traders lean bearish again
The taker long/short volume ratio in crypto futures has flipped bearish again, a pattern consistent with earlier in the week as rising oil prices and elevated Treasury yields keep bitcoin under pressure. Cumulative futures open interest has dropped 2% to $139 billion while volume has increased 5%, a sign of more churn and moderate capital outflows. Annualized funding rates, though, still hover around 5% for most major cryptocurrencies, reflecting a bias toward holding bullish long positions.
Macro tests loom before Friday's CPI print
Brent crude has moved above $100, while the US 10-year Treasury yield stood at 4.80% on Sept. 8, with futures traders recently leaning toward another Federal Reserve rate hike. Yet bitcoin remains above Glassnode's $76,600 True Market Mean and just below a dense band of cost-basis and liquidation levels between $83,000 and $86,000.
The Bureau of Labor Statistics will publish August inflation data on Sept. 11, with the Federal Reserve's decision following on Sept. 16. A loss of $76,600 would put Glassnode's $62,000 to $65,000 accumulation floor back in view.
Armstrong says bitcoin has bottomed for the cycle
Coinbase CEO Brian Armstrong said he believes bitcoin has bottomed for the current cycle and expects it to trend higher over the next one to two years leading into the next halving. In a Bloomberg Television interview: "I personally think we've seen the bottom of the bitcoin price in this cycle", Armstrong said. He also pointed to growth beyond bitcoin, saying stablecoin payments on Base have increased 700% year over year.
Sources: CoinDesk, The Block, CryptoSlate
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