3 Developments Tell of a Bullish Horizon for Crypto
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| By Marija Matic |
An encouraging announcement was made during the latest meeting of the Federal Reserve: it no longer anticipates an impending recession. Banks are also slowly changing their predictions as well, with JPMorgan Chase (JPM), being the latest bank to say it no longer expects a recession, either.
The positive updates weren’t just confined to TradFi, either. Another notable contender in the political arena has integrated Bitcoin (BTC, “A-”) into policy discourse. Argentinian presidential candidate Javier Milei, a prominent candidate has espoused the notion that Bitcoin holds the potential to eliminate the conventional central banking system.
Evidently, there is a discernible penchant for cryptocurrencies across the Latin American landscape.
Still, Bitcoin's response to these optimistic developments has been relatively muted, remaining within the trading range it has been stuck in for several weeks.
But BTC was able to garner some upside action. Earlier, it managed to breach the resistance level of $29,500 (marked below in blue), resulting in a modest upward shift in its price.
But in the crypto world, a price fluctuation of 1% still reflects subdued market volatility.
Additionally, you can see this isn’t the first time BTC has had enough momentum to break past resistance. As of yet, though, it hasn’t found the bullish support to sustain above it.
Obviously, we are long past the NFT mania on the Bitcoin network, with sales volume of Bitcoin Ordinals falling 95% from its May highs. Furthermore, the count of monthly unique buyers for these NFTs has dwindled from 72,000 to 8,000.
While the possibility of a resurgence for these digitally unique assets on the Bitcoin platform persists, the initial excitement surrounding them was conspicuously excessive and unsustainable.
Besides, Ethereum (ETH, “B”) is much more functional and effective when it comes to building NFTs on it. So, it’s unlikely that Bitcoin will steal its thunder in that sector.
Altogether, this tells me that despite developments and headlines, both bullish and bearish, nothing yet has provided enough momentum for sustained volatility in either direction.
But overall, we are seeing more bullish signs quietly popping up, like …
- Of the 14.59 million existing Bitcoin, 75% are now held by long-term holders. This is bullish because it means we are seeing a record number of committed people with long-term vision.
After all, 92.65% of all BTC has already been issued and only 1.54 million are left to be mined over the next 120 years. Sounds like a scarce resource indeed.
- The stablecoin market is flourishing again. Yup, the same stablecoin market that brought fresh dollars on-chain to the previous bull run has recovered from the slings and arrows it suffered over the past year.
We now have Dai (DAI, Stablecoin) giving 8% APR, various opportunities with Aave's (AAVE, "B-") new stablecoin as well as PayPal (PYPL) issuing their own stablecoin!
It’s no wonder private wealth management firm Bernstein predicts the stablecoin market cap to surge to $3 trillion by 2028. That figure represents a staggering 2,140% growth in the next five years and an influx of significant advancement in the sector.
- The anticipated approval of the spot BTC exchange-traded fund later this year or at the beginning of 2024. The clock has started, and the Securities and Exchange Commission will have to answer these applications by the first quarter of 2024.
That said, it is quite possible that we get BTC chop action and range trading until the end of Q1 2024. That’s when the last spot BTC ETF deadline for BTC will be. And that’s also just before the halving event in April! It may be a slow road with false starts till then.
What About ETH?
Meanwhile, ETH has been in an incredibly tight range around $1,850 for the past week. The volatility of ETH is in fact at record low!
This indicates that we are likely ripe for volatile price movements in the near future. So, buckle up!
Notable News, Notes & Tweets
- THORChain (RUNE, “C”) is about to secure a spot in the top 3 DEX platforms based on trade volume. RUNE’s bottom coincided with the end of a venture capital vesting period, according to the most influential THORChain validator.
- Visa (V) is testing ways to make paying Ethereum gas fees easier.
- In July, Kraken emerged as the most liquid platform for altcoins in the U.S., claiming almost half of the market depth for the top 10 alts.
- U.S. judge sends FTX’s Sam Bankman-Fried to jail over witness tampering.
What’s Next
In the short term, keep an eye on Bitcoin’s resistance level at $29,500. To see Bitcoin really take a truly positive turn, it needs to surpass $30,200 and hold it.
On the flip side, if those with a bearish outlook want to take the lead, they'll need to recapture $28,800 first.
Meanwhile, as long as ETH's trading price remains above $1,800, things remain stable and promising in the Ethereum realm.
Until one of these key levels breaks, we're likely in for more uneventful sideways trading.
Interestingly, institutional sentiment seems to be quietly turning positive. Investment products tied to digital assets experienced a weekly inflow of $29 million, marking a positive shift after three weeks of outflows.
The potential for more excitement looms as September approaches and the holiday period winds down.
So, be sure to use the remainder of August wisely. The stagnant summer won’t last long, and it provides a perfect opportunity to make sure you’re all set when the next big run comes.
Best,
Marija
