Markets
Bitcoin (BTC/USD) stabilizes: is this the bottom that the markets were waiting for?
Key points about Bitcoin, Ethereum and cryptocurrencies:
- Spot Bitcoin ETF flows show a net inflow of $31 million after 7 days of outflows.
- BTC/USD is up about 7% from the weekly low, but remains on track for a lackluster June.
- Mt. Gox could redeem up to $8.5 billion worth of crypto starting next month.
- SEC Chairman Gary Gensler Hints at Upcoming Ethereum (ETH) ETF Approval
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Bitcoin (BTC/USD) rebounded from its weekly low yesterday, climbing around 7% to trade just below the 62,500 mark. However, this morning we saw a resurgence in sellers, causing Bitcoin’s retreat from the 62,500 resistance zone, with attention now focused on the psychological support level at 60,000.
Monday’s selloff was partly facilitated by supply issues. Rumors have started circulating that Mt Gox (the Tokyo-based exchange), which ran into financial difficulties in 2014, could be about to return some $8.5 billion in crypto starting next month. This will be a relief for the exchange’s customers, but could add another layer of uncertainty to cryptocurrency prices. The increase in supply if Mt Gox were to continue could also hinder Bitcoin’s price action.
Bitcoin ETF flows showed a change yesterday after seven consecutive days of outflows. On June 25, the Bitcoin ETF saw net inflows of approximately $31 million. Despite this recent positive move, last week saw total outflows of around $1.1 billion from spot Bitcoin ETFs. Since the launch of 11 spot Bitcoin funds in January, total net inflows have reached $14.42 billion. Recent inflows may indicate that some market participants believe the recent price decline is over and expect a recovery, while others may expect a long-term average. Regardless, if flows continue to increase, this could help support BTC/USD.
Ethereum had a slightly better month than Bitcoin, likely due to excitement over the approval of the ETH ETF. There is growing speculation among crypto enthusiasts that the ETH ETF could be bigger than the Bitcoin ETF for major players like BlackRock. The advantages of Ethereum include the ability to stake and earn, as well as higher fees, which makes this hypothesis plausible. In significant support for the ETH ETF, SEC Chairman Gary Gensler indicated that approval was likely imminent, promising a welcome boost for the industry and Ethereum itself. Despite a 10% decline over the past 30 days, Ethereum remains up around 48% year to date.
Crypto Heatmap – A breakdown of each crypto’s performance, June 26, 2024
Source: TradingView.com (click to enlarge)
In other major news in the crypto space, Bybit, a major Singapore-based crypto exchange, has overtaken San Francisco-based Coinbase in terms of trading volume, securing its position as the second-largest crypto exchange. The latest data places Bybit just behind Binance, following substantial growth and scaling efforts. The regulatory issues that have clouded Binance since late 2022 have undoubtedly had an impact on the rise of Bybits. However, there are concerns that Bybit could face similar scrutiny to Binance. Less than a month ago, the Bybit exchange was blocked by the Financial Markets Authority (AMF) for operating without authorization. Is this going to be a failure or the start of a trial route for the new “big boy on the block”? Time will tell us.
Technical analysis on Bitcoin (BTC/USD)
Looking at BTC/USD from a technical perspective, the daily chart below shows a long-term ascending trendline that continues to hold and keeps me optimistic that a deeper retracement could remain elusive. Monday’s sell-off brought BTC/USD within a whisker of the 200-day MA and into the support zone around the 60,000 mark. Yesterday’s aggressive bounce failed to find a follow-up today so that the resistance around 61750 holds good.
The 50 and 100 day MAs appear to be preparing for a death cross pattern that would hint at a bearish continuation. However, it is important to remember that MAs are lagging indicators, as we saw last week when we had a golden cross pattern that was followed by a selloff. In other words, it is only a guide but it is not always accurate. If the bears take control, support around 59,000-60,000 must be overcome before the 200 day moving average resting at 57,736 comes into focus, and then of course, the long term ascending trendline. A break below the trendline and support low at 56,560 could see the push towards the 52,500 support area accelerate.
Alternatively, a recovery from the current price will require BTC/USD to break through the daily resistance area of 61,750 before moving back above the 50-day and 100-day MAs which currently sit just above the psychological handle at 65,000. For information, market volatility could increase on Friday when US PCE data is released and could also boost BTC/USD.
Bitcoin daily chart (BTC/USD), June 26, 2024
Source: TradingView.com (click to enlarge)
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