3-Minute Overview of Market Outlook: Has the Bottoming Process Ended, and Is an Uptrend Inevitable?
The market price correction is complete, and further upward momentum is building.Author: Wenser, Odaily Planet Daily
At 2 AM today, influenced by news of Biden's withdrawal from the race, the price of Bitcoin briefly fell to $65,764.5, then quickly rebounded, returning to around $68,000 for the first time in a month, currently reported at around $67,900; Ethereum's price briefly dropped to $3,411, then also rebounded above $3,500, currently reported at around $3,527. Odaily Planet Daily will organize and analyze the market trends and related viewpoints in this article for readers' reference.
Bullish View: Buying Operations Are More Honest Than Market Opinions
Currently, bullish views mainly stem from market trading operations, political policy news, and insights from market insiders.
Market Trading Operations: Strong Buying, Institutional Holdings Rising
According to Farside Investors data, U.S. Bitcoin spot ETFs achieved a cumulative net inflow of $1.196 billion this week, marking the third consecutive week of net inflows.
Specifically, U.S. Bitcoin spot ETFs saw inflows of $300.9 million, $422.5 million, and $383.6 million on Monday, Tuesday, and Friday, respectively. Nate Geraci, president of The ETF Store, stated that U.S.-listed spot Bitcoin ETFs hold over 900,000 Bitcoins, accounting for 4.3% of the total Bitcoin supply, with assets amounting to approximately $60 billion. Since its launch in January, net inflows have reached $17 billion.
According to HODL15 Capital disclosure, the German private equity and consulting firm Bitcoin Group SE has doubled its Bitcoin fund to €165 million.
The emphasis on ETF news is due to the fact that, according to Glassnode disclosure, miners' weekly Bitcoin balance fluctuates by about 500 BTC, while CEX and ETF balances may change by about 4,000 BTC weekly, indicating that the flow of real funds in Bitcoin ETFs may have an impact on the market that is approximately 4 to 8 times greater than that of miners.
Political Policy News: Trump as a Positive Factor, Beneficial for Long-term Development of Cryptocurrency
The U.S. Republican National Convention has approved a new platform proposed by former President Donald Trump, most of which is standard Republican policy, but with one significant exception: support for innovative cryptocurrency policies. Reportedly, Trump's new platform promises to defend Americans' rights to Bitcoin mining, self-custody of digital assets, and free trading.
Additionally, some believe that if Trump is elected president, the U.S. Securities and Exchange Commission (SEC) will no longer aggressively pursue the digital asset sector, and enforcement against the crypto industry will become more lenient.
Analysts from Wall Street investment bank Jefferies also believe that Trump's "public" support for Bitcoin will benefit U.S. stock-related cryptocurrency companies. Consequently, this may drive the cryptocurrency market upward.
QCP Capital stated that futures funding has returned to equilibrium, volatility is gradually decreasing, and BTC has returned to the familiar range of $61,000 to $71,000 for the second quarter, predicting that the market will bet on a breakout ahead of the U.S. elections. Even though overnight spot prices are lower, institutions still show significant interest in bullish options for $100,000 by December. This indicates that as the likelihood of Trump's victory increases, market confidence in a year-end rebound is becoming stronger.
Market Insiders: Government Stabilizes Holdings, CME Futures Net Positions Recover
Ari Paul, founder and CIO of BlockTower Capital, stated that news of the U.S. government's plan to hold Bitcoin as part of its strategic reserves may be "bullish" for its price, but achieving this goal in the short term is unrealistic.
Paul expressed a willingness to bet at 10:1 odds that the U.S. will not adopt Bitcoin as a strategic reserve in the next four years, but he believes Trump may mention this at the convention, which would indeed be very favorable for Bitcoin's mid-term trend.
Paul further explained that while the next president may say they "do not intend to sell" any Bitcoin currently held by the government, this does not mean they are actually "building a Bitcoin strategic reserve."
Anthony Scaramucci, founder of Skybridge Capital, also stated in an interview earlier this month that he is optimistic about Bitcoin's price, predicting it could reach $100,000 by the end of the year. He believes that the previous price correction was caused by temporary factors such as Mt. Gox payouts and the German government's sale of Bitcoin, and that the recovery of funds for FTX account holders could bring buying pressure to Bitcoin. Additionally, he emphasized Bitcoin's potential to become a long-term asset among Americans.
Ki Young Ju, CEO of CryptoQuant, stated that the net positions of Bitcoin CME futures contracts have returned to levels seen 10 months ago. He explained that CME Bitcoin futures were created in 2018 to meet the short-selling demand from hedge funds, and currently both long and short open interest have increased, but net positions are negative. Our current negative position is less than it was when Bitcoin's price was $27,000 ten months ago.
CME Bitcoin Futures Contracts Net Positions
Bearish View: The Rebound Is Temporary, Short to Medium-term Upsurge Lacks Strength
JPMorgan: Rebound Unsustainable, Bitcoin Futures Underperforming
JPMorgan analysts stated that any rebound in cryptocurrency prices may be tactical (temporary and strategic) rather than the beginning of a lasting upward trend. They pointed out that Bitcoin's current price of about $67,500 is high compared to its production cost of about $43,000 and the volatility-adjusted gold price (about $53,000), which "indicates mean reversion near the zero line, thus limiting Bitcoin's long-term upside potential."
The analysts reiterated that as liquidation volumes decrease after July, cryptocurrencies are expected to rebound starting in August. They noted that Bitcoin futures have recently underperformed due to liquidations from Gemini and Mt. Gox creditors, as well as the German government's sale of seized Bitcoins. The analysts expect these liquidations to fade after July and predict that Bitcoin futures will rebound starting in August, aligning with the recent rise in gold futures. Furthermore, if Trump is re-elected, it may benefit cryptocurrency companies and regulation.
Veteran Trader: Bitcoin Enters Downward Channel
Veteran trader Peter Brandt recently provided key insights on Bitcoin's price trend, stating that the current Bitcoin price pattern "displays a downward channel," indicating a potential downward trend in the near term, with both highs and lows being lower, connected by parallel trend lines. Typically, this pattern indicates ongoing selling pressure, leading traders to predict that the downward trend will continue. Additionally, Brandt emphasized that compared to gold, Bitcoin has significant long-term upside potential, and the BTC/gold ratio chart is forming a channel that may develop into the right shoulder of an inverted head and shoulders pattern, with an expected ratio of 150:1.
Peter Brandt K-Line Analysis Chart
Summary: Bullish Sentiment High, Awaiting Greater Positive Factors
Currently, the market's fear and greed index has surged from 25 on July 12 to 70, indicating that despite short-term negative "spikes," the current market sentiment is quite bullish, and events such as interest rate cuts in September, ETH spot ETF trading, and JD Vance becoming the Republican vice-presidential candidate may become major positive factors driving future price increases.
