CryptoNews of the Week– The rise in cryptocurrency prices is likely to be tactical and is not expected to mark the beginning of a prolonged upward trend, according to JPMorgan. The bank's experts noted that the current price of bitcoin significantly exceeds its mining cost ($43,000) and, compared to gold, appears overvalued relative to the "fair" price adjusted for volatility ($53,000). A significant upward deviation of prices from this latter parameter "limits the potential for long-term growth."
Analysts forecasted positive market dynamics in August, owing to the reduced impact of the sale of coins confiscated by German police and the distribution of coins among clients of Gemini and Mt.Gox. In this case, the price of bitcoin is expected to align with the trend in gold futures, where a recent rise has been observed. Experts also noted that both assets would benefit in the event of Donald Trump's victory in the upcoming U.S. presidential election.
– Bloomberg also reports that bitcoin miners and crypto companies, previously hindered from going public in the U.S., would benefit from a second term of Donald Trump’s presidency. The agency cites Christian Catalini, founder of the Cryptoeconomics Lab at the Massachusetts Institute of Technology, who stated, "Almost everyone in America would benefit if they chose to operate under the new rules once implemented."
In June, Trump met with miners, stating that bitcoin mining should become the "last line of defense against CBDCs." He added that he wants all remaining bitcoin to be "made in the USA."
Following Joe Biden's poor performance in the debates and a failed assassination attempt on Trump, the price of bitcoin rose by 10%, and shares of the two largest public miners, Marathon Digital and Riot Platforms, increased by 30%. Cipher Mining’s shares surged by nearly 50%. For the first time since the crypto market crash in 2022, industry companies are planning initial public offerings. USDC stablecoin issuer Circle filed for an IPO in January with a valuation of $33 billion. Crypto miner Northern Data, which is actively developing AI computing capabilities, is considering a U.S. listing, with a potential valuation of $16 billion. Kraken, the country's second-largest exchange, is also preparing for a stock market listing.
– U.S. President Joe Biden shocked the markets on Sunday, 22 July, when he announced his withdrawal from the presidential race. Some analysts suggested that this move could benefit bitcoin and other crypto assets, while others warned that investors should temper their excitement.
Analyst Josh Gilbert stated that Trump's increased chances of re-election represent "a huge boost for the asset class": "The longer we see Trump leading in the election odds, the more crypto assets will be worth following his victory." Gilbert explained, "It is hard to imagine Kamala Harris or another Democratic candidate overthrowing Trump's lead in the polls just three months before the end of this electoral race," but added, "a lot can happen during this period, so nothing can be ruled out."
Gary Black, managing partner of The Future Fund, shares a similar view. He warned his 433,000 followers on X that a Trump presidency victory is still far from certain. "Those who think that Trump/Vance will secure a decisive victory are getting ahead of themselves," Black wrote.
– Markus Thielen, the founder of 10x Research, suggested that the crypto-friendly Donald Trump might announce at the upcoming Bitcoin-2024 conference that he will make bitcoin a strategic reserve asset for the U.S. government. Currently, the government holds only 212,800 BTC, worth approximately $15 billion, whereas its gold reserves are around $600 billion. If the government were to double its bitcoin holdings, this would be "almost equivalent" to the price impact of the net inflow into bitcoin exchange-traded funds (ETFs) since the beginning of the year.
– U.S. Senator and Republican Party member Cynthia Lummis highlighted that during a recent major system outage at Microsoft, caused by a software update error from CrowdStrike, the bitcoin network remained unaffected, while other industries experienced complete chaos. The bitcoin blockchain and associated cryptocurrency services continued to operate without disruptions. The senator quoted the Latin phrase "Vires in Numeris," meaning "strength in numbers," underscoring that the primary cryptocurrency's network employs complex mathematical algorithms to ensure security and stable operation even in unpredictable technical circumstances.
Senator Lummis recently proposed backing the U.S. dollar with bitcoin to improve the country's financial system. She also voiced opposition to the introduction of a digital dollar, fearing it could compromise citizens' privacy..
– Arthur Hayes, the former CEO of the cryptocurrency exchange BitMEX, warned that voters supporting cryptocurrencies may lose their influence on politicians after the presidential elections in November 2024. He suggested that if a regulatory framework for digital assets is not established before the elections, the newly elected president and their administration are likely to shift focus to other pressing issues. Geopolitics may overshadow discussions about cryptocurrencies, with the president's attention potentially diverted to international conflicts, particularly those involving Iran and Russia.
"The capital required to support laws aimed at developing cryptocurrencies may be redirected to addressing more urgent foreign policy issues. Therefore, regulatory clarity must be achieved now, before the political landscape changes after the elections," Hayes stated.
– At the beginning of the year, Nigel Green, CEO of deVere Group, predicted a rapid rise in bitcoin to $60,000, which proved accurate. He now believes that the demand for the leading cryptocurrency will continue to grow, and its price could reach $100,000 by the end of the year. "Bitcoin is likely the best asset for growth potential by the end of the year," writes the financier. "It is currently priced at $65,000, but many expect it to hit $100,000 by year-end. Is this possible? Certainly, because the number of bitcoins is limited. If demand for BTC increases, the price will go up. Bitcoin is not the same as the U.S. dollar, where the Federal Reserve can simply print more." Green also noted that the possible election of Donald Trump as President of the United States could further benefit bitcoin.
– Analyst and trader RLinda identifies the bullish flag pattern as a key indicator of a potential upward movement for bitcoin. This pattern, observable on both daily and weekly charts, is characterised by a sharp upward movement followed by a consolidation phase. RLinda expects that a breakout from this consolidation could continue the previous uptrend, with a potential target around $90,000.
Support and resistance levels are crucial in this analysis. The key support levels at $59,300 and $63,800 have shown strong buying interest and stability. High trading volumes at these levels reinforce expectations that they will hold during any potential pullbacks.
Critical resistance levels are marked at $67,250 and $71,754. Overcoming these resistance points is necessary for BTC to advance towards higher targets. The all-time high (ATH) at $73,743 is particularly significant, with a successful breakout potentially triggering further bullish momentum.
– Peter Brandt, head of Factor LLC, expressed skepticism that the price of bitcoin will exceed $71,000 and set a new record. He stated, "I try to be as honest as possible when identifying patterns. The current stagnation in the bitcoin market is incorrectly labeled as a flag (it has lasted too long); it actually represents a descending channel. Anything that lasts longer than 4-6 weeks is not a flag," wrote Brandt.
The flag pattern, which some analysts believe has emerged on the BTC/USD chart, is typically a precursor to a bullish rally. However, the descending channel mentioned by the veteran trader suggests a price decline. This pattern is characterised by lower highs and lows, which have been established since bitcoin reached its all-time high in March.
Based on the chart Brandt published, he believes that bitcoin's price will not surpass the resistance line around $71,000. If this scenario plays out, a bearish trend may ensue, potentially driving the price of the digital asset down to $51,000. The descending channel is slightly widening, indicating that price volatility is expected to increase over time.
– Analysts from the cryptocurrency market maker Wintermute predict that Ethereum could rise to a maximum of $4,300 in 2024. They believe that demand for this altcoin will be lower than expected, estimating that investment in these derivatives will range between $3.2 billion and $4.0 billion in the first 12 months following the start of trading. Under this scenario, the ETH price could increase by a maximum of 24% during 2024, reaching approximately $4,300.
In contrast, researchers at ASXN have made a more optimistic forecast. They predict that monthly capital inflows into Ethereum ETFs will range from $800 million to $1.2 billion. This suggests that by the end of the year, at least $6-7 billion will be invested in ETH-based exchange-traded funds, significantly exceeding the figures provided by Wintermute's analysts.
– The pace of Ethereum's potential bull rally will heavily depend on the capital inflow into ETH-ETFs shortly after trading begins. However, the launch of these products has not yet generated significant excitement in the cryptocurrency market, with investors responding cautiously to the event. Experts from QCP Capital reminded that after the launch of similar BTC-ETFs, bitcoin's price initially dropped to $38,000, but then hit historical highs two months later. (Although, it should be noted that the BTC halving may have played a significant role at that time.)
Currently, the options market suggests a potential decline in Ethereum's price in the near term. This expectation is reinforced by news of pressure from the U.S. government and the situation surrounding Mt.Gox. These factors add uncertainty and create additional challenges for ETH's growth. "As a result, ETH's price may remain stagnant or even decline until a new catalyst emerges," QCP Capital analysts suggest.
Experts also caution against underestimating the impact of political factors. As the U.S. elections approach, cryptocurrency market volatility may increase. Statements and actions by key political figures can create new opportunities or threats. Therefore, investors should be prepared for price swings and closely monitor news developments.
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