Week of August 13-19, 2024
Russian President Vladimir Putin has approved a law aimed at reducing the country’s reliance on the U.S. dollar in international trade. This law includes provisions to support small-scale Bitcoin mining within the country and is set to take effect in November 2024.
Morgan Stanley, the largest wealth manager in the U.S., has allowed its 15,000 financial advisors to recommend Spot Bitcoin ETFs to clients. The bank will promote BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC). Morgan Stanley's advisory network currently manages about 3.75 trillion USD in assets, including 1 trillion USD in self-directed client accounts.
The U.S. Securities and Exchange Commission (SEC) has postponed its listing decision for the Hashdex Nasdaq Crypto Index ETF, which was filed by Nasdaq. This spot ETF will diversify investments into 10 major cryptocurrencies, including Bitcoin and Ethereum.
A recent survey by the law firm Barnes & Thornburg reveals that 84% of U.S. participants believe private investments in cryptocurrencies will rise over the next 12 months. The majority of respondents show increased confidence in cryptocurrencies due to the growing participation of institutions and companies in the market.
Transaction volume on the Ethereum chain has dropped to its lowest levels in five months, with a 7-day average of 1.12 million transactions per day, the lowest since February. Additionally, the number of active wallets has decreased to 400,000. In contrast, transactions on Layer-2 solutions have surged.
The supply of staked Ethereum has reached a record high of 27.95%. Since the launch of Spot Ethereum ETFs, the amount of staked Ethereum has grown significantly, with liquid staking (a tool allowing users to access already-staked tokens for other purposes) increasing by over 60% this year.
According to Coin98 Analytics through social media, nearly all the 30 tokens listed on Binance in the first half of this year have seen negative returns, averaging losses between 50-90%. This decline is largely due to the distribution of these tokens through airdrops, which reduced their value from the first day of trading.
Sentiment analysis shows that whale-level Bitcoin transactions have reached their highest levels since April. Wallets holding between 10 and 1,000 BTC have been accumulating Bitcoin continuously as the price dipped to 50,000 USD.
Bitcoin has rebounded strongly from its low of 49,000 USD through significant buying pressure. The support level at 54,000 USD is expected to hold, and the price is likely to recover this week due to reduced concerns about a U.S. economic recession. The first resistance level is at 62,000 USD; if surpassed, Bitcoin could test the key resistance at 70,000 USD.
Ethereum (ETH)
Ethereum has started to recover but has yet to turn bullish until it breaks the first resistance at 3,000 USD. If this level is surpassed, the medium-term target is 4,000 USD. However, it is crucial to watch the previous low at 2,100 USD. If this level holds, the recovery trend may continue.
Sui (SUI)
Sui has gained 72.59% over the past week with a short-term upward trend. This week, focus on the support level at 0.60 USD, which could be a buying opportunity. The target for next week is the resistance level at 1.40 USD. The strategy is to buy on dips.
1000Sats gained 38.34% last week but remains highly volatile. It's advised to wait for dips before buying and avoid chasing the price. The short-term strategy is to buy at the support level of 0.00023 USD. If this level fails, pause investment. If it holds, the resistance target for this week is 0.00040 USD.
The investment market is less concerned about a U.S. economic recession, and the unwinding of the yen carry trade (a strategy whereby a high-yielding currency funds the trade with a low-yielding currency) has helped Bitcoin prices recover along with the stock market. The downside risk appears limited due to strong Bitcoin purchases around the 50,000 USD level.
The Fear & Greed Index has returned to 20, indicating lingering investor concerns. A short-term negative factor is the U.S. election poll results, where Kamala Harris is leading Donald Trump. This may affect the crypto market due to expectations that a Trump victory could be more favorable for crypto.
A key highlight this week is the July CPI (consumer price index) announcement on Wednesday, with the market expecting it to remain at 3%, the same as the previous month. A lower-than-expected figure would be positive for the market as it increases the likelihood of the Federal Reserve cutting interest rates at the next meeting.
The probability of an emergency rate cut by the Federal Reserve has decreased. The market is likely to focus on the annual Federal Reserve meeting in Jackson Hole, where monetary policy direction may be announced, affecting both financial markets and cryptocurrencies.
For the investment strategy this week, the market is expected to recover after Bitcoin's price hit a low. In the past 2 instances, the price rebounded to test the 70,000 USD resistance level but has yet to return to its previous peak. The focus should be on accumulating large-cap coins like Bitcoin and Ethereum, while mid-cap coins such as Solana (SOL) and Binance (BNB) are also recommended.
References
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