- Bitcoin is beginning to recover despite an increasing liquidation volume, a negative net taker volume, and overwhelming short trading positions.
- Institutional investors are keen on ETFs, as Fidelity and BlackRock have accumulated over 300,000 $BTC since January 10.
- The regulatory landscape, monetary shifts, and infrastructure development paint a bullish picture for the crypto industry, especially with the upcoming US presidential elections.
Despite a rough 3.19% weekly drop for Bitcoin ($BTC) and the increasing clusters of liquidation volume, bulls remain confident in the coin’s potential.
Even the negative net taker volume, which suggests overwhelming short trading positions, doesn’t stifle the optimism.
Institutional investors are excited about $BTC ETFs, with Fidelity and BlackRock accumulating over 300,000 $BTC ($19.3B) since January 10.
In its latest Institutional Insights report, crypto exchange Gemini expects a crypto market expansion due to favorable regulatory shifts, monetary policies, and infrastructure development.
Let’s analyze the current crypto context, see why Bitcoin’s retracting, and why the industry remains bullish.
Bitcoin Is in Pain as it Hovers Above Critical $63K Support Level
After briefly touching the $70K level earlier this week, Bitcoin went dark and slumped below $63K yesterday, which is a critical support level.
If bulls manage to hold the $63K level and push above, sellers might give up, signifying a price recovery and a potential rally toward $70K.
According to an X analyst, Bitcoin’s slump also manifests in the increased weekly clusters of liquidation volume, which coincided with the recent drop below $62K on August 1. He further said $BTC might continue the decline over the coming week.
Over the last 24 hours, the price of BTC has dropped by 3.2%. Judging by the weekly clusters of liquidation volumes, the decline may continue for a week or more. https://t.co/7Rw1btrzKr pic.twitter.com/05rLyTbreO
— Axel 💎🙌 Adler Jr (@AxelAdlerJr) August 1, 2024
The 24-hour Bitcoin net taker volume is also negative across perpetual exchanges, which shows a bearish market sentiment and a large number of short trading positions.
However, Bitcoin is now $64,200 after recovering from yesterday’s dump, so the above decline prediction might be off, though it might be too soon to tell.
On the other hand, the crypto market might continue expanding over the next two years, and this includes Bitcoin.
ETF Exposure and Political & Monetary Shifts Could Benefit Crypto
A Gemini Institutional Insights report mentions three factors that could push the crypto industry beyond the bearish scenario:
1. Favorable monetary policies (decreasing interest rates)
2. Beneficial regulatory shifts (a Republican presidential win in the US elections)
3. Infrastructure development (rapid growth of stablecoins and prediction markets)
With Bitcoin achieving a $73K ATH in March, $ETH ETFs recording greater inflows than $BTC ETFs, and Fidelity and BlackRock accumulating 300,000 $BTC since January 10, the market shows an unmistakable recovery pattern, despite a current market cooldown ($ETH down by 23% from its March ATH of $4,090.)
With Donald Trump’s pro-crypto attitude and promise to ‘make the US a Bitcoin superpower,’ we might be looking at a hyper-optimistic crypto future, especially if interest rates keep declining.
If Kamala Harris’ pick for Vice-President is pro-crypto, it could have the same effect, especially given her recent pivot to pro-crypto topics.
As interest rate risks skew to the downside, this may translate into depreciation pressures for the U.S. dollar. If a broad weakening of the dollar occurs, crypto prices should also rise.Gemini Report
As the regulatory landscape shifts in crypto’s favor, infrastructure development (like Web3 development) should enhance market growth.
Our Verdict – Crypto’s Healthy Outlook Shows Great Potential
Despite the temporary market slump, evidence points to long-term market growth, with Bitcoin potentially retesting the $70K resistance level.
The upcoming presidential elections and Trump’s potential win should bring significant support to Bitcoin, leading to higher price points and increased institutional investments.
References
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Disclaimer: The opinions expressed in this article do not constitute financial advice. We encourage readers to conduct their own research and determine their own risk tolerance before making any financial decisions. Cryptocurrency is a highly volatile, high-risk asset class.
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