Bitcoin breaks $70,000 again: a brief peak and a market correction
On July 30, 2024, after more than a month of slump, Bitcoin (BTC) briefly broke through the $70,000 mark, reaching a high of $70,050. This price high has attracted widespread attention and discussion in the market, and many investors and analysts have begun to speculate whether Bitcoin will set a new record high again. However, the high volatility and unpredictability of the market made this high point unsustainable, and the price of Bitcoin quickly fell back. This situation once again reminds investors that the cryptocurrency market is full of risks and uncertainties.
Nashville Bitcoin Conference: Key Event Driving Market Sentiment
The short-term surge in Bitcoin prices is partly attributed to the Bitcoin Conference held in Nashville, Tennessee, USA from July 25 to 27, 2024. The conference attracted global attention due to its scale and influence, as well as the attendance and speech of former US President Trump. Trump's remarks and proposals sparked widespread discussion and market response at the conference.
Trump's remarks and proposals
Trump made a series of bold suggestions about Bitcoin at the conference, including establishing a strategic reserve of Bitcoin in the United States and firing Gary Gensler, the current chairman of the Securities and Exchange Commission (SEC). He believes that these measures will help the United States take the lead in the global cryptocurrency field. In addition, Trump also declared that the United States will become the center of global cryptocurrency and even a "Bitcoin superpower." These remarks not only caused heated discussions at the conference, but also had a direct impact on the Bitcoin market, driving a short-term rise in prices.
Other important speeches: further boosting market expectations
In addition to Trump, speeches by other important figures also attracted widespread attention at the conference. For example, US presidential candidate Robert F. Kennedy Jr. said at the conference that if he is elected president, he will sign an executive order instructing the US Treasury to purchase 550 bitcoins per day until the reserve reaches 4 million BTC. He believes that this move will greatly increase the valuation of Bitcoin and may even push its market value to hundreds of trillions of dollars. In addition, he also proposed changing the policy of the US Internal Revenue Service so that transactions between Bitcoin and the US dollar do not need to be reported or taxed. If implemented, this proposal will have a profound impact on Bitcoin's trading volume and market participation.
U.S. Senator Cynthia Lummis also expressed strong support for Bitcoin at the conference. She suggested that the U.S. government buy 5% of the total supply of Bitcoin and hold it for at least 20 years. This proposal was supported by Michael Saylor, founder of MicroStrategy, who predicted that the price of Bitcoin could reach $49 million by 2045. Robbie Mitchnick, head of digital assets at BlackRock, called on investors to actively buy Bitcoin ETFs (exchange-traded funds). He pointed out that almost all buyers of the ETF (IBIT) are long-term holders, as evidenced by the fact that in the past six months, IBIT has only had one day of net outflows. These speeches show that some institutions and individuals are optimistic about the long-term prospects of Bitcoin.
Market correction: risks and uncertainties
Despite a series of positive comments and market activities, Bitcoin quickly pulled back after breaking through $70,000 in the short term, which may be related to the market's expectations of a potential pullback in Bitcoin after the conference. A report released by Bitfinex Alpha during the conference pointed out that the implied volatility of the Bitcoin options market once soared, but has recently declined. This change may indicate that Bitcoin prices will experience a small consolidation in the short term.
In addition, on the morning of July 30, a small test transfer (0.02 BTC) appeared again from the Mt.Gox address. Considering that Mt.Gox had previously made substantial large transfers after similar operations, this also exacerbated the panic in the market and further amplified the callback. It is reported that the low point of the callback that day occurred around 8:15, shortly after the news broke. This incident once again reminded investors that the volatility and uncertainty of the Bitcoin market are still high.
ETF Market Performance: Institutional Investors’ Optimism
Despite the volatility in the Bitcoin market, the ETF market has remained strong. According to monitoring data from Trader T, on July 29, the US Bitcoin spot ETF had a net inflow of $123.1 million. This means that in the past half month (only counting trading days), the ETF market had only one day of net outflow, while other trading days maintained positive inflows. This data shows that institutional investors are still optimistic about the long-term prospects of Bitcoin.
Bitcoin Ecosystem Project Focus
As the price of Bitcoin fluctuates, some Bitcoin ecological projects have also attracted the attention of investors. In particular, some projects closely related to Bitcoin, such as SATS and CKB, have received more attention.
SATS is a BRC inscription head project in the Bitcoin ecosystem, and it also has meme attributes. Recently, SATS has performed strongly compared to ORDI, and the market expects that there may be related good news. CKB is a Bitcoin Layer 2 project based on the extension protocol RGB++, dedicated to solving the shortcomings of the Bitcoin ecosystem. CKB continues to improve the technical level of the project in the competition of Layer 2 solutions, demonstrating strong technical potential.
Changes in the POW sector: Performance of BCH, KAS, and BSV
POW (proof of work) coins such as BCH, KAS, and BSV have also performed well recently. Especially after Trump attended the Bitcoin Conference, the prices of these coins rose significantly in the short term.
BCH, KAS, and BSV rose by 15%, 12%, and 18% respectively after Trump attended the conference. The market believes that this is related to Trump's favorable policies for the mining industry at the conference. The popularity of POW coins has risen sharply in a short period of time, with significant inflows of funds and traffic. Investors and analysts need to continue to pay attention to the attention of miners to these tokens on social platforms such as YouTube and Telegram.
In addition, the increase or decrease in the amount of open contracts is also an important market indicator. For example, the amount of open contracts for BCH has increased recently, which indicates that there is hot money flowing into the market. Through contract data, we can observe the main capital trends in the market, such as the increase in contract longs and the increase in trading volume, which are important references for judging market trends.
Summarize
The price of Bitcoin quickly pulled back after breaking through $70,000, showing the high volatility and complexity of the market. Despite many positive news and policy support, the market performance of Bitcoin is still full of uncertainty. With more and more institutional investors participating in the Bitcoin market and changes in the global policy environment, the future of Bitcoin is still full of variables. For investors, being cautious, paying attention to market dynamics, and conducting appropriate risk management are the keys to coping with this highly volatile market.
The sectors that need to be focused on in the future include Bitcoin ecological projects such as SATS and CKB, and currencies in the POW sector such as BCH, KAS, and BSV. The performance of these projects and sectors will be significantly affected by policy changes and market sentiment. Investors need to pay close attention to relevant developments in order to make wise investment decisions.
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