The sentiment among investors does not currently reflect that we are in a bull market. Frustration dominates. Frustration over the indecision of the price. Frustration over the weakness of their investments. And frustration over the lack of exciting events. Does this fit the current phase of the market cycle? You’ll read more about it in this Weekly!

This Weekly in brief:

• Market: The price of bitcoin continued to decline this week. Some altcoins had an even worse week. Nevertheless, we have remained within the price range of the past three months.
• News: The SEC has informed Consensys lawyers that the investigation into Ethereum has been definitively closed. The feared lawsuit is off the table and Ethereum is 'cleared.'
• Behind the Scenes: This week we are attending two inspiring events. Today, we were at the Dutch Blockchain Days. On Thursday and Friday, you can find us at The Next Web Conference. Will we see you there?

Market update

June has been frustrating for many crypto investors so far. In the first days, we climbed from the month’s opening at $67,400 to nearly $72,000 on June 7. Would we finally break out to new record highs and end the three-month correction?

Unfortunately, the disappointment isn't over yet. A new period of decline began, with a temporary low of $64,000 on Tuesday, June 18. Last week’s Weekly showed that this decline is part of a large, choppy sideways movement. Or as analyst James Check called it this week: “Chop chop chop-solidation.”

This week, we zoom out a bit further. The chart below shows the weekly bitcoin chart over the past four years. We note the following:

Since the bottom of this market cycle in November 2022, we have been in an upward trend, characterized by a series of higher highs (HH) and higher lows (HL). This pattern is only broken by a bottom below $38,500.

In the multi-year cycle of bull and bear markets, the 50-week average is dominant and a good demarcation line between the rising and falling parts of the cycle. We are currently well above that, as it is at $45,500.

The highest weekly close in April 2021 was $59,985. In November 2021, we went slightly above that, but it remained a false breakout. Since March this year, every weekly close has been above the highest weekly close of April 2021. You could say: the past three months have played out above the peak of April 2021.

These are all positive signals. Most indicators suggest that we are in a correction or consolidation within a larger bull market. And then we will resume the upward trend at some point and break out of the price range at the top.

This might take a while, possibly until September. Even then, compared to the bottom of the bear market and the halving, we would be on track if you compared this cycle to the previous two. Despite understandable feelings of boredom and frustration, the outlook for a continued bull market looks good.

When you look closely at such a directionless period, you often see contradictory signals. Lower highs and higher lows, for example. Or losing support on the daily chart but maintaining support on the weekly chart. Positive and negative patterns. That’s part of it.

Today, we want to highlight a positive pattern. Or rather, a ‘potential pattern,’ because as long as a pattern isn’t complete, it can still change into another pattern or become part of a larger pattern.

Below you see the bitcoin chart over the past six months. We’ve drawn a line over the tops of the consolidation of the past months, which could become the neckline of an inverted head-and-shoulders pattern.

This is a powerful pattern that comes onto many radars if it is completed. For this to happen, the price needs to drop a bit further, then rise and break through the neckline. We’ve indicated this route with the dashed line.

This further drop to $60,000 is ideal for the pattern but not necessary. Bitcoin often tends to skimp on the right shoulder. However, it wouldn’t be unexpected since we expect a daily cycle low in the second half of June.

If we break out above the neckline, a first price target is $85,000, based on the Fibonacci extension. This could very well be a pause in a larger rise. If the rise from October to January or from January to March repeats, we could rise 90%, from $56,500 to $107,000.

News overview

In recent days, sentiment around Ethereum seems to be shifting. Two events are responsible for this. First, the SEC informed Consensys lawyers that the investigation into Ethereum has been definitively closed. The outcome: everyone and everything is cleared. Although SEC Chairman Gary Gensler hasn’t said it in his media appearances, Ethereum supporters celebrate this as a de facto classification of ether as a commodity.

They also lean on the spot ether ETFs that are about to launch in the US. This process accelerated this week. The applicants reported receiving “very reasonable” comments from the regulator, resulting in revised application forms. “There is no reason for further delay,” writes ETF specialist Nate Geraci. “I think the funds will open sooner than July 2.”

Now that the fate of the ether funds seems to be settled, the conversation in the corridors turns to a new question: which coin comes after bitcoin and ether and becomes the third with a spot ETF? Solana is often mentioned as the favorite.

For Solana, this would be a huge step forward. Compared to bitcoin and ether, Solana’s market value is relatively small. If the popularity of the bitcoin funds also applies to Solana, it could have a significant impact on its price. As you can imagine, this prospect is causing excitement.

But before you act, it’s good to know that there are no concrete sources for these rumors. It seems mostly like wishful thinking, based on Solana’s current popularity and its high position in the top 10 largest coins.

Let’s make a reasoned guess instead of wishful thinking.

For both bitcoin and ether, futures trading had been going on for years on the regulated US exchange CME before the spot funds were approved. These futures showed that the markets for bitcoin and ether are efficient and resistant to manipulation, two key conditions for approving an ETF.

Additionally, Solana is involved in two regulator lawsuits, which argue that Solana should be classified as a security. The SEC has doubts about decentralization and believes that the issuance of SOL tokens too closely resembles how companies issue shares.

Given these points, a quick introduction of a Solana ETF seems unlikely. Looking at the past, it could take at least two to three more years before this becomes possible. A political surprise could speed up the process, and that’s not unthinkable during and after a US election year!

Other news:

• Bitcoin Price Could Rise to $1 Million, Thinks Bernstein: The asset manager gave this estimate in the context of valuing a share of MicroStrategy. Bernstein analysts expect the top of this cycle to be around $200,000. By 2029, it should have risen to $500,000. The predicted record should be written in 2033. Bernstein manages more than $750 billion for its clients.
• Arbitrum Launches Growth Fund for Crypto Games: The decentralized organization (DAO) behind Arbitrum, a layer-two platform running on Ethereum, has approved a proposal to finance startups that produce and release games on the network. A total of 225 million ARB tokens are reserved for this, worth over $215 million. So far, gaming as a sector has lagged compared to other sectors, such as AI, the bitcoin ecosystem, RWA, and DePIN.
• Fortune 500 Companies Embrace Blockchain: Research by Coinbase shows that they are connecting to public blockchain networks one way or another. Compared to a year ago, the number of ‘on-chain projects’ has increased by 39 percent. No less than 56 percent of Fortune 500 companies say they are working on it. According to Coinbase, this technology is no longer just hype, but an integral part of modern business strategies.