Cryptocurrency
3 reasons why Bitcoin’s price is primed to hold the $30,000 level as support
Bitcoin’s price gave back some of its recent gains this week, but multiple data points suggest that $30,000 should hold as support going forward.
Bitcoin (BTC) remained within a narrow 4.3% range for the 15 days leading up to July 7. Despite the proximity of the $29,895 to $31,165 range, investors’ sentiment was significantly impacted by an unsuccessful attempt to break above $31,400 on July 6.
Traders’ tendency to overreact to short-term price movements rather than Bitcoin’s year-to-date gains of 82% could be part of the reason for the short-term correction. This same rationale applies to the events related to other cryptocurrencies.
At the forefront of investors’ minds are questions about whether the recent price gains were solely driven by multiple spot Bitcoin exchange-traded fund (ETF) requests.
Other pressing developments include Binance’s chief strategy officer, Patrick Hillmann, and other top compliance officers reportedly leaving the exchange on July 6 over CEO Changpeng Zhao’s response to the United States Justice Department’s investigation. On June 29, the crypto exchange also informed users that its euro banking payment gateway would cease services by September, potentially halting deposits and withdrawals via SEPA bank transfer.
Meanwhile, the yield curve on interest rates reached its deepest inversion since 1981 on July 3, reflecting the two-year note’s 4.94% yield compared to the 10-year note trading at 3.86%, the opposite of what is expected from longer-term bonds. The phenomenon is closely watched by investors, as it has preceded past recessions.
All of these events are likely having some impact on the Bitcoin price and investor sentiment. Both topics are explored in greater depth below.
Traders show strength in margin, options and futures markets
The OKX margin lending indicator based on the stablecoin/BTC ratio has steadily increased from 20x favoring longs on July 1 to the current 29x ratio on July 7, indicating growing confidence among traders using margin lending. However, it remains within a neutral-to-bullish range, below the historical 30x threshold associated with excessive optimism.
Besides leaving room for further long leverage, the indicator shows no signs of potential stress on margin markets in case of a sudden Bitcoin price correction.
Traders aren’t buying protective puts or increasing their shorts
Traders can also gauge the market’s sentiment by measuring whether more activity is going through call (buy) options or put (sell) options. A 0.70 put-to-call ratio indicates that put option open interest lags the more bullish calls and is, therefore, bullish. In contrast, a 1.40 indicator favors put options, which can be deemed bearish.
The put-to-call ratio for Bitcoin options volume has remained below 1.0 for the past three days, suggesting a higher preference for neutral-to-bullish call options. The important thing here is, despite Bitcoin’s price briefly correcting to $29,750 on July 7, there was not a significant surge in demand for protective put options.
The top traders’ long-to-short net ratio excludes externalities that might have solely impacted the options markets. There are occasional methodological discrepancies between different exchanges, so readers should monitor changes instead of absolute figures.
The long-to-short ratio for OKX’s top traders increased from 0.52 on July 3 to 1.68 on July 7, indicating strong demand for leveraged long positions despite Bitcoin’s failure to break above $31,000. At Binance, the indicator declined from 1.52 on July 3 to 1.39 on July 7, remaining above its 1.33 average for the previous 30 days, which suggests a neutral reading.
Related: Bitcoin mining stocks outperform BTC in 2023, but on-chain data points to a potential stall
Bears will have a tough time given the markets’ expectation of a potential ETF approval
Natalie Brunell, an award-winning TV journalist, podcast host and educator in the Bitcoin space, spoke to Cointelegraph on how crypto is now being taken more seriously as an asset class by institutional investors, as evidenced by the multiple Bitcoin ETF filings, including by some of the world’s largest asset fund managers.
Speaking on Fox Business on July 5, Larry Fink, the CEO of BlackRock, also said that Bitcoin’s role was largely “digitizing gold,” suggesting U.S. regulators consider how a spot ETF could democratize finance. Fink suggested that investors could turn to Bitcoin as a hedge against inflation or the devaluation of certain currencies.
So, from a bird’s-eye view, for those questioning whether Bitcoin is poised for a correction after a rally fueled by ETF hype, the resilience of traders’ bullish conviction and lack of excessive optimism observed in the BTC margin show they need to relax.
Bitcoin options and futures markets indicate that challenging times are ahead for Bitcoin bears and those expecting a sharp price correction solely due to regulatory and recessionary concerns.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The United States Federal Reserve will meet on September 18 and 19 to discuss whether it will follow the example set by other central banks, such as the ECB, and start lowering the key interest rates after years of hiking.
This is a particularly intriguing event for all financial markets, but especially crypto, given its relatively short history and its susceptibility to similar news and developments. As such, it’s interesting to see what US investors have done to prepare, at least in terms of ETF investments in Bitcoin and Ethereum.
Bitcoin Buying
Ever since their inception in mid-January this year, the 11 spot Bitcoin ETFs have showcased the general sentiment from US investors toward the largest cryptocurrency. Their activity has also impacted the underlying asset’s price movements, as long buying streaks have led to rallies and vice-versa.
Their actions are heavily influenced by market news and the overall status of the local economy. For example, they went on a short-term buying spree on August 23 and 26 (Friday and Monday) after Jerome Powell said the US central bank will likely cut the interest rates soon.
Although their behavior changed in the next couple of weeks due to economic uncertainty, they started to accumulate once again in the past several days. FarSide data shows that the total net inflows toward all spot BTC ETFs in the US soared to $186.8 million on Tuesday, which was the last full trading day before the FOMC meeting.
Previously, the positive numbers stood at $12.8 million on Monday, a whopping $263.2 million last Friday, and $39 million last Thursday. This means that US-based investors have stacked up their BTC ETF portfolios by just over $500 million in the past four trading days.
What About ETH?
The spot Ethereum ETFs have failed to attract serious demand and interest from investors, as discussed in the past. The trend hasn’t really changed that much this week as the total outflows stood at $9.4 million on Monday and $15.1 million yesterday.
This means that even the promising news for riskier assets, such as the potential rate cut by the Fed, couldn’t help the Ethereum ETFs in terms of changing investors’ perspective.
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TL;DR
- The CEO of BecauseBitcoin invested heavily in XRP, citing specific technical analysis as the reason.
- XRP’s NVT ratio has fallen to around 125, which is considered undervalued, potentially supporting the case for future price growth.
Change of Heart
The X user Max (CEO and founder of the crypto analysis platform BecauseBitcoin) recently jumped on the Ripple (XRP) bandwagon as an investor. The exec revealed purchasing “a lot of” XRP tokens based on the emergence of a specific chart.
Max promised to release a dedicated video on the matter and explain the technical analysis which led to that move.
“Never in a million years would I have thought this would be the case… but the chart never lies,” they added.
Numerous X users praised Max’s decision to enter the XRP ecosystem. MandoCT (a popular trader with almost 500,000 followers on the social media platform) said this is “an easy trade to $1.50-$1.90.”
Max was even more bullish, replying to one of the comments that he expects a spike to as high as $5 sometime next year.
Other optimistic analysts envisioning a price explosion for XRP in the future include Mikybull Crypto and EGRAG CRYPTO. The former believes the recent chart of the asset reminds the one observed in 2017 which was later followed by a massive bull run.
“Analysts refer to this chart as a technical time bomb waiting for an explosion,” the enthusiast stated.
EGRAG CRYPTO presented five different scenarios for a potential XRP price rally. The targets vary from $3 to a “mega pump” of $27.
“My Color? I’m choosing ALL of them! I’ll sell small portions at each key target. Let’s not make the same mistake as last cycle. While in the last cycle I sold a bit around $1.85, I bought back around $1 thinking we’d hit a new high (past $1.96). Lesson learned – this time, we’re READY,” the analyst said.
Escaping Overvalued Conditions
One important factor worth considering when speculating on XRP’s future market dynamics is the NVT (Network Value to Transactions) ratio.
The metric measures the relationship between market capitalization and the value of transactions conducted on the blockchain. A high ratio suggests the asset could be overvalued, potentially signaling the likelihood of a price correction.
While the NVT soared substantially toward the end of August, it has been on a downfall ever since. Currently, the ratio stands at around 125, which is generally considered an undervalued territory.
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[PRESS RELEASE – Dubai, UAE, September 18th, 2024]
BNB Chain, the community-driven blockchain ecosystem that includes the world’s largest smart contract blockchain, has announced new developments as part of a strategic focus to become the core infrastructure for stablecoin payments and digital financial transactions. This move is part of BNB Chain’s broader mission to bridge the gap between Web2 and Web3, making cryptocurrency as practical for everyday transactions as traditional money, and reinforcing its commitment to onboarding the next billion Web3 users.
BNB Chain aims to make stablecoin payments faster, cheaper, and more accessible for users by focusing on gasless transactions across centralized exchanges (CEXs), wallets, and bridges. By partnering with leading payment providers, gas-free transfers for USDT, USDC, and FDUSD will be supported. BNB Chain invites wallet providers, payment gateways, and merchants to contribute to the future of the stablecoin infrastructure here.
Key Developments:
- Gasless Transfers on CEXs: BNB Chain will collaborate with centralized exchanges to ensure users can take full advantage of fee-free transfers, providing opportunities to maximize their savings on every transaction such as Binance, Bitget, Gate.io, HTX, and MEXC. Additionally, MegaFuel, an innovative global gasless solution developed by NodeReal and sponsored by BNB Chain, will cover gas fees for users across CEXs, wallets, and decentralized applications (Dapps).
- Enhanced Wallet Support: BNB Chain is partnering with top wallet providers including Bitget Wallet and SafePal with Binance Web3 Wallet and Trust Wallet coming soon, to facilitate seamless, low-fee stablecoin transactions for users.
- Free and Easy Cross-Chain Transfers: BNB Chain is enhancing liquidity and interoperability through collaborations with leading bridge providers like Celer. This will enable zero-fee transfers and superior liquidity, simplifying the movement of assets across different blockchains.
- Real-Life Payment Integration: In a bid to integrate cryptocurrency into everyday transactions, BNB Chain is working with payment gateways such as Alchemy Pay, Oobit, Lunu, MugglePay, and Now Payment. These collaborations will facilitate real-life payments, allowing users to make everyday purchases, like buying a coffee, with stablecoins, making cryptocurrency transactions more practical and affordable. The payment gateway can be accessed here.
BNB Chain is committed to accelerating the adoption of stablecoin payments, tokenizing real-world assets, and making cryptocurrency as accessible and practical as traditional money in pursuit of its mission of onboarding the next billion Web3 users. As part of the enhancement of its stablecoin infrastructure, BNB Chain is launching the “Gasless Carnival Season” from September 19, 2024. This campaign will offer zero withdrawal fees on stablecoins from participating CEXs to BSC and opBNB, covers gas fees for transfers via participating wallets, and sponsors gas-free cross-chain transfers via participating bridges. More details will be released soon.
For more information, users can visit here.
About BNB Chain
BNB Chain is a community-driven blockchain ecosystem that is removing barriers to Web3 adoption. It is composed of:
- BNB Smart Chain (BSC): A secure DeFi hub with the lowest gas fees of any EVM-compatible L1; serves as the ecosystem’s governance chain.
- opBNB: A scalability L2 that delivers some of the lowest gas fees of any L2 and rapid processing speeds.
- BNB Greenfield: Meets decentralized storage needs for the ecosystem and lets users establish their own data marketplaces.
Setting a high bar for security, the AvengerDAO community protects BNB Chain users while Red Alarm provides a real-time risk-scanner for Dapps. The ecosystem also offers a range of monetary and ecosystem rewards as part of its Builder Support Program.
For more, readers can follow BNB Chain on X or start exploring via the Dapp library.
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