July 29th Bitfinex Alpha | BTC consolidation expected after bull run
On Bitfinex Alpha
Bitcoin has surged today (July 29) to hit $70,000 on Bitfinex, despite a brief pullback during the week and some strong resistance. BTC has now recovered more than 30% from its low on July 5, which we previously forecasted as a local low.
This upward momentum coincided with the Bitcoin 2024 Nashville conference. Implied volatility in the BTC options market also initially spiked but later declined as traders became less risk-averse. With a significant options expiration approaching on Friday, August 2, there is a possibility that some calm will return to the market, signaling a period of price consolidation or a minor downtrend.
In fact, despite the upper resistance being broken, net market selling was evident last week, with profit taking weighing on the market, and this was also due to the gradual distribution of BTC to Mt. Gox bondholders. However, the market absorbed this well, suggesting that a stronger hand was involved. Also, the current short holder realization price is $65,700, which serves as solid support. The futures market also saw a surge in open interest, indicating that leverage is back in play. Leveraged longs pushed prices up despite the spot market selloff.
The next move in the market will be important going forward. The recent decline in implied volatility and the increase in leveraged positions suggest a short-term stagnation or range-bound trading. With key support holding and bullish momentum building, an interesting week is in store for BTC.
The U.S. economy grew stronger than expected in the second quarter of 2024, with GDP growing at an annual rate of 2.8%, beating forecasts. The growth was driven by significant consumer spending and business investment, underscoring the economy’s resilience.
Inflationary pressures have also eased, with prices rising moderately as lower commodity costs offset higher service prices, increasing the likelihood that the Federal Reserve will cut rates in September. However, the housing market remains a drag on growth, with existing home sales falling more than expected due to record median home prices. Nevertheless, increasing supply and falling mortgage rates offer hope for a potential rebound. Overall, the economic outlook is cautiously optimistic, with strong growth, moderate inflation, and potential improvements in the housing market.
Last week in crypto news, the SEC approved Form 19b-4 for Grayscale’s new Bitcoin Mini Trust, ticker “BTC.” The trust will distribute new shares to GBTC shareholders, bringing transparency and order to the market. Meanwhile, the Michigan State Pension System has invested $6.6 million in the ARK 21Shares Bitcoin ETF, following a similar but much larger investment in Wisconsin City.
On the regulatory front, the Federal Reserve has ended all enforcement actions against Silvergate Bank and its parent company, Silvergate Capital Corporation. However, despite ceasing banking operations, Silvergate still faces legal challenges, including a recent SEC lawsuit alleging its involvement in the FTX scam.
In politics, US presidential candidate Donald Trump has emphasized Bitcoin’s potential to revolutionize the US economy and has emphasized his desire to establish America’s dominance in cryptocurrencies. Trump has pledged to appoint a new SEC chairman who supports crypto innovation and has proposed a strategic national Bitcoin reserve. He has also predicted that Bitcoin will outperform traditional assets, has opposed central bank digital currencies and has pledged to make the US a leading cryptocurrency nation.
Have a great trading weekend.