Sentiment Turns Positive After Turbulent Trading Week

We’ve had a tumultuous crypto week. This weekend, the market broke through an impasse characterized by worry and doubt, paradoxically triggered by a disturbing event. Is this a temporary rebound? Or are we heading into a period of new gains? Find out more in this Weekly!

• Market: The crypto market experienced an impressive recovery last week. The price of bitcoin rose from $57,000 to $65,000, and ether's price increased from $3,050 to $3,500.
• News: Sentiment in the crypto market has quickly shifted. Doubt and uncertainty have given way to optimism. Three stories are central to this: the political turnaround in the US, the fading of themes that caused investor doubt, and the strong performance of American crypto funds.

Market Update

On March 14, bitcoin set an all-time high of $73,800. Since then, the crypto market has been in a correction, processing the spectacular rise of the previous six months.

The lowest point was noted on Friday, July 5, with a price of $53,500, which is 27% lower than the peak. From a historical perspective, this is a normal correction for bitcoin. However, since corrections over the past year and a half were typically no deeper than 20%, this was a bit of a shock for some.

A large part of last week was characterized by worry and doubt. The German government sold 50,000 bitcoins, with miners and MtGox payouts yet to come. The price was trapped below the 200-day average at $59,000 and the lower edge of the price range where it moved sideways for four months at $60,000.

This past weekend, the price broke through these levels. The assault on the $60,000 threshold began shortly after news broke that former President Trump had survived an assassination attempt. On the way up, short-position liquidations provided extra fuel. These investors had bet on further declines and were forced to close their positions by buying bitcoin as the price rose.

The next significant resistance level is around $64,000. There, a higher top would be established than the one on July 1. Additionally, the 50-day average and the average purchase price of recent investors are located there. The price has been knocking on the door over the past two days and is trying to break through definitively today.

If successful, we might revisit the top of the correction structure, now around $71,300. A breakout above this would lead to new all-time highs.

During such a turbulent drop as around July 5, many investors wait to see what happens. They may want to buy but delay the actual purchase. Why buy today if everything will be cheaper tomorrow?

When the price starts to rise again, this pent-up demand may be unleashed. This provides tailwinds for the entire crypto market, but especially for ether. Reportedly, the SEC has asked ETF applicants to submit their final applications today, so trading can start on Tuesday, July 23.

The ether chart below looks strong. The low from early July is barely lower than the previous lows in this correction. The downward trendline has already been defeated and tested as support. Above $3,500, the price also breaks through the 50-day average. A rise to the upper side of this price range is then likely.

News Overview

On a cold January night in 1901, an event occurred that turned American politics upside down. When President William McKinley visited an exposition in Buffalo, New York, he was shot by the young anarchist Leon Czolgosz. Czolgosz struck during the mandatory handshaking with the public.

The assassination attempt on McKinley brought Vice President Theodore Roosevelt to power. During his terms, Roosevelt implemented a series of reforms known as the Square Deal. His plan improved the position of consumers, strengthened the position of workers, and disciplined the power of large corporations. The result? Under Roosevelt, the US began a period of robust economic growth, laying the foundations for modern America.

Fast forward to 2024. This weekend, the world was shocked by an assassination attempt on former President Donald Trump, which he narrowly survived. Amid the ensuing commotion, bitcoin experienced a sudden value increase. Like in 1901, a worrying event has paradoxically resulted in other concerns fading away. A paradoxical situation no one wishes for from tragedy and uncertainty, hope and optimism can arise.

Apart from this paradoxical similarity, the parallel between Trump and Roosevelt is marked mainly by differences. Different characters, different views, and different eras. The seemingly constructive Republican plans regarding crypto still need to prove themselves. But three days after the assassination attempt, optimism about this has firmly rooted itself in the crypto market. Three stories are central to this: the political turnaround in the US, the fading of themes that caused investor doubt, and the strong performance of American crypto funds.

During the period when the crypto market was weak, bitcoin funds from BlackRock, Fidelity, and other asset managers showed strength. With that hopeful signal in mind, investors are looking forward to the launch of similar ether funds. According to ETF insiders, this is die scheduled for Tuesday, July 23!

Other News:

• BlackRock CEO Legitimizes Bitcoin: ‘I Was Wrong’: Larry Fink spoke about this on the American talk show Squawk Box. “As you know, I was skeptical. I was proud of that,” Fink said. “But I dived in and learned about it. I believe bitcoin is a legitimate financial instrument.” According to Fink, bitcoin deserves a place in a balanced portfolio because it can protect against inflation and generate “uncorrelated returns.”
• Bitcoin’s Energy Consumption Is More Sustainable Than Ever: Climate activist Daniel Batten writes this on X. According to Batten, 56.2% of the electricity used by the bitcoin network comes from a sustainable source. Batten has open-sourced the method and data underlying this calculation. Earlier, Batten reported on X that traditional media have been predominantly positive about bitcoin mining since 2024.
• SEC Ends Investigations into Paxos and Stacks: Paxos was informed by the watchdog last week that it is clear of its role in issuing the stablecoin BUSD. With Stacks (STX), it appears the regulator failed to argue that the token should be classified as a security. Both Paxos and Stacks celebrate the outcome as a victory for themselves and other players in the American market.