The world's largest cryptocurrency by market capitalization is down 2% on the day after reaching a 24-hour high of around $45,986, CoinDesk data show. At press time, bitcoin was changing hands at around $44,400.
Bitcoin has fallen squarely back below its 200-day moving average, invalidating a breakout on Aug. 13.
"We still have support at $44,000 and $42,000, which is the line in the sand for short-term momentum," Jon de Wet, chief investment officer at digital asset firm Zerocap, told CoinDesk via Telegram.
The firm pointed toward flows to safe-haven assets in light of the instability in Afghanistan that was sparked by the exit of the U.S. military as well as concerns over the COVID-19 Delta variant.
Headwinds in China, with its slowing economy and tech sector crackdown, are also affecting the crypto markets, but so far, the Liquid hack having little impact. That's a sign of continuing bullish sentiment, the firm noted.
"A daily break below $42,000 would place some confidence in the bears, but on balance, we believe [the] price will hold above this level over the coming week," de Wet said.
On-chain indicators point to bitcoin holding above that level, at least in the short-term, as so-called smart money flows out of exchanges continue to reign supreme, Glassnode data show.
Generally, "smart money" dominates exchange flows, according to Zerocap. If bitcoin is leaving exchanges, it can indicate an intention to hold. Conversely, when bitcoin moves onto exchanges, it can indicate an intention to sell.
"Ethereum even more so, with exchange balances hitting an all-time low this week," de Wet said. "Leverage is not excessive in this market right now – all very supportive of a buoyant week ahead, despite the macroeconomic landscape."
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.