At 2 a.m. today, the price of Bitcoin once dropped to $65,764.5, and then quickly rebounded, returning to around $68,000 after a month, and is currently around $67,900; the price of Ethereum once dropped to $3,411, and then also rebounded to above $3,500, and is currently around $3,527. This article summarizes and analyzes the market situation and related views for readers' reference.
VX:ZLH1156
Bullish: Buying is more honest than market opinion
Market trading operations: strong buying, institutional holdings increased
The US Bitcoin spot ETF has achieved a net inflow of $1.196 billion this week, which is also its third consecutive week of net inflow. Among them, the US Bitcoin spot ETF received inflows of $300.9 million, $422.5 million and $383.6 million on Monday, Tuesday and Friday respectively. The spot Bitcoin ETF listed in the United States holds more than 900,000 Bitcoins, accounting for 4.3% of the total supply of Bitcoin. The assets are about $60 billion. Since its launch in January, the net inflow of funds is $17 billion.
The reason for emphasizing the ETF news is that miners' Bitcoin balances fluctuate by about 500 BTC per week, while CEX and ETF balances may change by about 4,000 BTC per week, which shows that the impact of Bitcoin ETF physical fund flows on the market may be about 4 to 8 times higher than that of miners.
Bearish: The rebound is short-lived, and the short- to medium-term growth is weak
Bitcoin futures show weakness as rebound is unsustainable
Any rebound in cryptocurrency prices is likely to be tactical (temporary and strategic) rather than the start of a durable uptrend. 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 prices.”
Cryptocurrencies are expected to rebound from August as liquidations subside after July. Bitcoin futures have been weak recently due to liquidations by Gemini and Mt.Gox creditors and the sale of seized Bitcoin in Germany. These liquidations are likely to subside after July, and Bitcoin futures are expected to rebound from August, in line with the recent rise in gold futures.
Bitcoin enters a descending channel
The current Bitcoin price pattern is "showing a descending channel," which indicates a recent downtrend with lower highs and lower lows connected by parallel trendlines. Typically this pattern indicates continued selling pressure, leading traders to predict that the downtrend will continue. In addition, Bitcoin has significant long-term upside compared to gold, and the BTC/gold ratio chart is forming a channel that may develop into the right shoulder of an inverted head and shoulders pattern, with a projected ratio of 150:1.
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. This 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 and ETH spot ETF trading may become the main positive factors driving the market to rise in the future.
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