Resilient US job and inflation data and steady spot Bitcoin ETF inflows aided Bitcoin’s rally above $60,000.
Bitcoin (BTC) gained 4% between Aug. 21 and Aug. 22, and despite losing some momentum, it has sustained the $60,000 support. Some analysts argue that a break above the $62,000 resistance is necessary to confirm a bullish trend. However, given the market’s confidence in the United States Federal Reserve (Fed) implementing expansionary measures, the odds still favor Bitcoin bulls.
Investors balance risk as Bitcoin futures dip, reflecting uncertainty before the Federal Reserve's September meeting.
Although Bitcoin (BTC) has gained 21% since it retested the sub-$50,000 level on Aug. 5, its price has struggled to maintain above $62,000. Meanwhile, the S&P 500 index has fully recovered and is now trading just 1% below its all-time high set on July 16.
Bitcoin faces several conflicting trends, including derivatives metrics reflecting low buyer interest and macroeconomic indicators suggesting that traders are increasingly shifting away from cash positions. Interestingly, these stock market gains have coincided with a notable decline in US Treasury yields, which signals robust demand for these traditionally safe instruments.
In essence, traders are now willing to accept lower returns on fixed-income assets, likely reflecting a growing confidence in the Federal Reserve’s (Fed) strategy to curb inflation without sparking a recession. The Fed is widely expected to cut interest rates on Sept. 18 after maintaining rates above 4% since December 2022.
ETH’s onchain and derivatives data are looking stronger even as macroeconomic data remains concerning.
Ether (ETH) price experienced a sharp 33.9% decline from $3,203 on Aug. 2 to $2,188 on Aug. 5, reaching its lowest level in over seven months. This crash followed a broader market correction in the crypto sector. However, with Ether's price rebounding by 23.7% from its Aug. 5 low in less than 36 hours, traders are now questioning whether ETH can reclaim the $3,000 mark.
To understand whether this bounce from the Aug. 5 lows is sustainable, it's essential to analyze the factors that triggered the initial price drop. Some analysts suggest that the Japanese stock market initiated the sell-off after the Nikkei 225 suffered intraday losses of 13% on Aug. 5. This movement followed the Bank of Japan’s decision to raise interest rates for the first time in 17 years on July 31.
Despite the Nikkei 225 closing only 4.6% down on Aug. 5, the effects were felt across all markets. The S&P 500 index dropped 3%, and gold fell 2.7% from its Aug. 5 high to $2,477. Ether's decline was more pronounced due to the higher volatility inherent in the cryptocurrency sector and the excessive leverage used by ETH bulls. This disparity also explains how Ether managed to reclaim the $2,500 level on Aug. 6.
Bitcoin whales and miners remain cautiously optimistic, strengthening the bullish case for $64,300 support.
On June 18, Bitcoin's (BTC) price tumbled 5.6% over the course of the day to $64,300, reaching its lowest level in over a month.
The six-day downtrend coincided with macroeconomic data pointing to a slowdown in the U.S. economy, particularly in retail sales and employment. Meanwhile, the U.S. Federal Reserve has kept interest rates at their highest level in two decades. However, the resilience in the derivatives markets points to a potential BTC price recovery ahead.
U.S. retail sales increased a modest 0.1% from the previous month, below the economists' consensus of 0.3%, according to Yahoo Finance.
Bitcoin's resilience amid price drops indicates strengthening support at the $65,000 level.
Despite testing the $65,000 support on June 14, Bitcoin (BTC) hasn't closed below $66,000 since May 17. While BTC was unable to break above the $72,000 resistance during this four-week period, some events have improved regulatory sentiment and highlighted how little room the U.S. central bank has left to maneuver without triggering inflation. Favorable market conditions and resilience in Bitcoin derivatives metrics indicate that the downside is extremely limited.
On May 16, U.S. lawmakers passed a Congressional Review Act to explore a Securities and Exchange Commission (SEC) rule that requires listed companies, including banks, to record crypto assets as both assets and liabilities on the balance sheet. According to Senator Cynthia Lummis, this vote was a milestone as it was the first “standalone crypto legislation” passed by Congress.
The resolution was eventually vetoed by President Joe Biden, but the defiance from Democrats demonstrates the “growing number” and “rising influence of crypto participants" in U.S. politics, according to Craig Warmke, a Bitcoin Policy Institute fellow. While Biden’s veto presents a challenge, both chambers of Congress would need a two-thirds majority to overrule it.
Cantor Fitzgerald has been managing Tether’s now $90 billion Treasury portfolio since late 2021.
Howard Lutnick, the CEO of Wall Street firm Cantor Fitzgerald has praised stablecoin issuer Tether (USDT), describing himself as a "big fan" of the firm.
"I'm a big fan of this stablecoin called Tether...I hold their treasuries. So I keep their treasuries, and they have a lot of treasuries,” Lutnick said in a Dec. 11 interview with CNBC.
“They're over $90 billion now, so I'm a big fan of Tether,” the Cantor Fitzgerald CEO said.
Bitcoin price keeps going up but retail traders are not piling in yet. Cointelegraph explores why.
The total market capitalization of the cryptocurrency market surged past $1.55 trillion on Dec. 5, driven by remarkable weekly gains of 14.5% for Bitcoin (BTC) and 11% for Ether (ETH).
Despite the recent bullish momentum, analysts have observed that retail demand remains relatively stagnant.
Retail investors aren't paying attention to #bitcoin.
— Rajat Soni, CFA (@rajatsonifnance) December 2, 2023
They are more worried about whether or not they will be able to pay rent or put food on the table.
They will likely start paying attention near the next top (IMO sometime in 2025) and they will FOMO into a position before…
Numerous U.S. However, Ed Yardeni, an analyst, suggests that the "Santa Claus rally" might have already occurred earlier this year, with the S&P 500 gaining 8.9% in November.
This rise reflected diminishing inflationary pressures and robust employment data.
With no dependable indicator to track retail participation in cryptocurrencies, a comprehensive data set is necessary for making conclusions, beyond relying solely on Google Trends and crypto-related app download rankings.
The premium of USD Tether (USDT) in China serves as a valuable gauge of retail demand in the crypto market.
