Original｜Odaily Odaily( @OdailyChina )
Author: Wenser ( @wenser 2010 )
At 2 a.m. today, perhaps affected by the news of Biden's withdrawal from the election, the price of Bitcoin once fell to $65,764.5, and then quickly rebounded, returning to around $68,000 after a month, and is currently reported at around $67,900; the price of Ethereum once fell to $3,411, and then also rebounded to above $3,500, and is currently reported at around $3,527. Odaily will organize and analyze the market situation and related views in this article for readers' reference.
Bullish: Buying is more honest than market opinion
Currently, bullish views mainly come from market trading operations, political policy news and the views of market sources.
Market trading operations: strong buying, institutional holdings increased
According to Farside Investors data , the U.S. Bitcoin spot ETF achieved a net inflow of US$1.196 billion this week, marking its third consecutive week of net inflows.
Among them, the US Bitcoin spot ETF received inflows of US$300.9 million, US$422.5 million and US$383.6 million on Monday, Tuesday and Friday respectively. Nate Geraci, president of The ETF Store , said that the US-listed spot Bitcoin ETF holds more than 900,000 Bitcoins, accounting for 4.3% of the total supply of Bitcoin. The assets are about US$60 billion. Since its launch in January, the net inflow of funds has been US$17 billion.
German private equity and advisory firm Bitcoin Group SE has doubled its Bitcoin funding to 165 million euros, HODL15 Capital disclosed .
The reason why the ETF news is emphasized is that according to Glassnode, the Bitcoin balance of miners fluctuates by about 500 BTC per week, while the CEX and ETF balances may change by about 4,000 BTC per week, which shows that the impact of Bitcoin ETF physical capital flows on the market may be about 4 to 8 times higher than that of miners.
Political policy news: Trump is a positive factor for the long-term development of cryptocurrencies
The Republican National Convention approved the new platform proposed by former President Donald Trump for the Republican Party. Most of the content is standard Republican platform, but there is a big exception: support for innovative crypto policies. It is reported that Trump's new platform promises to defend Americans' rights to Bitcoin mining, self-custody digital assets, and free trade.
In addition, there is a view that if Trump is elected president, the U.S. Securities and Exchange Commission (SEC) will no longer be so active in pursuing the digital asset field, and law enforcement on the crypto industry will become moderate.
Analysts at Jefferies, a Wall Street investment bank in the United States, also believe that Trump's "public" support for Bitcoin will benefit US cryptocurrency-related stocks. According to the collateral effects, this may drive the cryptocurrency market up.
QCP Capital said that futures funds have returned to a flat level, volatility has gradually declined, and BTC has returned to the familiar second quarter range of $61,000 to $71,000, predicting that the market will bet on a breakthrough on the eve of the US election. Even though the overnight spot price is low, institutions still have a lot of interest in the $100,000 call option in December. This indicates that as the possibility of Trump's victory increases, the market is more confident about the rebound at the end of the year.
Market sources: Government stabilizes positions, CME futures contract net positions recover
Ari Paul, founder and CIO of BlockTower Capital , said that news that the U.S. government plans to hold Bitcoin as its strategic reserve may be "bullish" for its price, but it is unrealistic to achieve this goal in the short term.
Paul said he was willing to bet at odds of 10:1 that the United States would not use Bitcoin as a strategic reserve in the next four years, but he believed that Trump might mention this matter at the conference, which would indeed be very beneficial to the medium-term trend of Bitcoin.
Paul further explained that while the next president may say they “don’t plan to sell” any of the Bitcoin currently held by the government, that doesn’t mean they are actually “building up a strategic reserve of Bitcoin.”
Anthony Scaramucci, founder of Skybridge Capital, also expressed optimism about the price of Bitcoin in an interview earlier this month, predicting that it could reach $100,000 by the end of the year. He believes that the previous price correction was caused by temporary factors such as the Mt.Gox compensation and the German government's selling of Bitcoin, and the recovery of funds for FTX account holders may bring buying to Bitcoin. In addition, he emphasized the potential of Bitcoin to become a long-term asset among Americans.
CryptoQuant CEO Ki Young Ju said that the net position of Bitcoin CME futures contracts has returned to the level of 10 months ago. He explained that CME's Bitcoin futures were created in 2018 to respond to the short needs of hedge funds. Currently, both long and short open interests have increased, but the net position is negative. We now have fewer negative positions, which is similar to the level when the Bitcoin price was $27,000 10 months ago.
CME Bitcoin futures contract net position
Bearish: The rebound is short-lived, and the short- to medium-term growth is weak
JPMorgan: The rebound is unsustainable, Bitcoin futures are weak
Analysts at JPMorgan Chase said , any rebound in the cryptocurrency’s price is likely to be tactical (temporary and strategic) rather than the start of a durable uptrend. They note that Bitcoin’s current price of around $67,500 is high compared to its production cost of around $43,000 and the volatility-adjusted price of gold (around $53,000), which “suggests mean reversion to zero, limiting the potential for long-term gains in Bitcoin’s price.”
Analysts reiterated that cryptocurrencies are expected to rebound from August as liquidations decrease after July. They pointed out that Bitcoin futures have recently been weak due to the liquidations of Gemini and Mt.Gox creditors and the sale of seized Bitcoin by the German government. Analysts said that these liquidations may subside after July and expect Bitcoin futures to rebound from August, in line with the recent rise in gold futures. In addition, if Trump is re-elected as president, it may be beneficial to cryptocurrency companies and regulation.
Senior trader: Bitcoin enters a downward channel
Veteran trader Peter Brandt recently provided key insights into Bitcoin price action, arguing that the current Bitcoin price pattern "shows a downward channel," which indicates a recent downtrend with lower highs and lower lows connected by parallel trend lines. Typically this pattern indicates continued selling pressure, leading traders to predict that the downtrend will continue. In addition, Brandt emphasized that Bitcoin has significant long-term upside potential compared to gold, and the BTC/gold ratio chart is forming a channel that could develop into the right shoulder of an inverted head and shoulders pattern, with an expected ratio of 150:1 .
Peter Brandt candlestick chart
Summary: Bullish sentiment is high, waiting for greater positive news
At present, the market fear and greed index has soared from 25 on July 12 to 70, which shows that despite the negative "pin" of short-term news, the current market bullish sentiment is relatively high, and events such as the September interest rate cut, ETH spot ETF trading, and JD Vance becoming the Republican vice presidential candidate may become the main positive factors driving the market to rise in the future.
