Following some slow rolling momentum higher, Bitcoin crossed $46,000 for the first time since May 2021. This latest rally pushes Bitcoin’s YTD return to 58.56%, topping the S&P 500’s 17.95% gain.
The Fundamental Look
Following Bitcoin’s latest bullish momentum, the latest year-to-date return for the largest cryptocurrency by capitalization reached 55.92%, far more than the S&P 500’s 20.19% gain.
Per Datamish, this recent push to higher price highs (HH) and higher price lows (HL) was due to a short squeeze wherein 126 BTC short positions were liquidated on Friday, August 6th. Moreover, accelerating outflows from exchanges suggest that short-term selling isn’t in the cards. Furthermore, on-chain data from Arcane Research shows that BTC reserve outflows have increased sharply, indicating that investors are holding and that the market appetite for BTC is growing.
Despite concerns over the proposed crypto taxes in the U.S. infrastructure bill, institutional activity has increased. However, the price of BTC fell slightly after the Senate rejected an amendment related to crypto taxation rules in the infrastructure bill. Nevertheless, global asset management company VanEck has filed for a new Bitcoin Futures ETF, becoming the fourth brand to apply for such a specific BTC ETF since last week.
According to Shane Ai, Product & R&D at Bybit, “BTC’s +11% rally month-to-date has been primarily driven by spot buying, despite endless regulatory FUD and without signs of overheating in derivatives. Fundamentally this has been catalyzed by broadening institutional offerings, which focus largely on BTC and filling the role Grayscale used to occupy – albeit more quietly.”
In mining news, Bitcoin’s hashrate is climbing steadily, looming close to hashrate levels seen during May’s all-time high (ATH). Also, Fidelity Investments has purchased a 7.4% stake in Bitcoin mining farm Marathon Digital Holdings (MARA), just as the company’s bitcoin production increased 66% month-over-month in July. Additionally, Black Rock Petroleum Company (BKRP) has joined forces with Optimum Mining Host to set up one million Bitcoin mining rigs. These rigs, sourced from China, will be deployed and operated in the company’s three different natural gas-producing sites in Alberta.
Meanwhile, in terms of adoption, AMC Entertainment Holdings Inc. (AMC) has announced that it will start accepting BTC for movie tickets and concessions ordered online by the end of this year. Additionally, Venmo, PayPal’s (PYPL) popular app, has added a ‘cashback to crypto’ feature, which will allow its credit users to earn rewards in BTC and other cryptocurrencies.
Whales of the Week
- August 5: 7,092.371 BTC moved between unknown wallets
- August 6: 10,430.155 BTC moved between unknown wallets
- August 6: 6582.110 BTC moved between unknown wallets
- August 8: 9,000.000 BTC moved from multiple addresses to discusfish/f2pool/mtgox/freebitco.in
- August 8: 6,001.000 moved from multiple addresses to Coinbase
- August 9: 6,265.296 BTC moved between unknown wallets
- August 10: 4,000.000 BTC moved from multiple addresses to Binance
The Technical Take
Bitcoin prices have surged sharply, breaking through key resistance levels at $43,000 and $45,000 while surpassing $46,000 for the first time since May, recording a gain of 16.18% over the last seven days alone. This latest rally marks Bitcoin’s best weekly performance in the previous three months. Still, the seminal cryptocurrency underperformed peers during the previous seven sessions, with ADAUSD soaring 29.02% and ETHUSD rising 18.91% over the comparable timeframe. (See Bitcoin Stock Comparison on TipRanks)
The latest rally has been stopped in its tracks after failing to overcome the 50% Fibonacci retracement level, including the May highs and June lows. Given the recent momentum higher and overbought RSI (Relative Strength Index), a near-term correction to the downside could see prices dip as low as $41,000 before resuming the prevailing, short-term upward trend.
In the meantime, BTCUSD is trading above its 200-day moving average, acting as support at $45,250. Any dip below this level could see prices slide to $42,850 and possibly as low as $41,000 following the recent rally higher. On the upside, resistance sits at $47,000, with any break higher potentially paving the way for a resistance test at $49,350 and the significant psychological level at $50,000.
Disclosure: Reuben Jackson held no position in any of the stocks mentioned in this article at the time of publication.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.
