[Bitcoin Now] -2.92% Compared to Jeonju... Narrow Box Range

As of 3:18 PM on December 31, the price of Bitcoin is recorded at 54.7 million KRW. Source: CoinMarketCap

On the last day of 2023, the price of the representative virtual asset Bitcoin is consolidating within a narrow range. After a sharp rally earlier this month, it has given back some of its gains and is currently holding the $42,000 (55 million KRW) support level.

According to the global virtual asset market tracking site CoinMarketCap, as of 3:18 PM on the 31st, Bitcoin's price was recorded at 54.7 million KRW, up 0.31% from the previous day. Compared to a week ago, it has fallen by 2.92%.

Bitcoin's price broke through the $40,000 (52 million KRW) mark on the 4th but encountered stronger-than-expected resistance at the $44,000 (57 million KRW) level. A support level at $42,000 (55 million KRW) has also formed, resulting in sideways movement within a narrow range.

On around the 9th of this month, Bitcoin's price touched 60 million KRW intraday, marking the highest level since the beginning of the year. This was also the highest price in over two years since December 2021. This was driven by expectations of a U.S. Federal Reserve (Fed) rate cut next year and the potential launch of a Bitcoin spot exchange-traded fund (ETF) in January. If a Bitcoin spot ETF is approved, large-scale institutional funds could flow into the virtual asset market. The halving event expected in April next year was also seen as a positive factor. The halving refers to the point when the number of Bitcoins miners receive as a reward for mining a block is cut in half. According to market logic, when the supply of a product decreases, prices typically rise.

The recent pause in price movement is believed to be mainly due to profit-taking sales. Blockchain media The Block cited the virtual asset investment product manager ETC Group as attributing the recent Bitcoin price drop to profit-taking sales. It was analyzed that sales mainly came from short-term holders with holding periods of less than 155 days.

The market diagnosis is that investment sentiment, which had weakened, slightly improved as the year-end approached. Investors in Bitcoin exchange-traded products (ETPs), who influence supply and demand trends, shifted from a selling bias to a buying bias. Han Jong-mok, a researcher in the Digital Transformation division at Mirae Asset Securities, said, "Compared to the first half of December, supply and demand in the latter half have improved slightly, though still weak," adding, "The net selling trend from Bitcoin ETFs has subsided and reversed to net buying."

On the other hand, ahead of next year's halving, the competition among miners to secure mining machines in advance has increased the scale of miners' sales compared to this summer, which is not favorable from a supply-demand perspective. Researcher Han noted, "The hash rate, a measure of Bitcoin mining competition, has risen 2.2 times compared to the end of last year," and added, "Many mining companies are actively pursuing a strategy to secure as many mining machines as possible before the halving occurs."

Virtual asset investment sentiment remains at a greed level. According to data from the virtual asset data provider Alternative, the Fear & Greed Index, which measures investment sentiment, stood at 67 points (greed) on the 31st (local time), down 1 point from the previous day (68 points, greed) and 4 points lower than last week (71 points, greed). Alternative's Fear & Greed Index ranges from 0, indicating extreme fear and pessimism about investing, to 100, indicating extreme optimism.