Communications

“Where there’s smoke, there’s fire?” The excitement surrounding a spot exchange-traded fund (ETF) has significantly stimulated the cryptocurrency market over the past seven days, breaking through the consolidation channel that has been in place for the last seven months. This sudden bullish action is particularly encouraging as it is happening during a bearish trend in the US stock indices and while gold refuses to break through its own accumulation channel in the current persistent inflationary context.

We’ve had a particularly interesting week in terms of price action for bitcoin. After a judgment against the SEC in its decision to prevent Grayscale from converting GBTC into a spot ETF, the price quickly approached $28,000. Then, on Monday, the erroneous announcement of the acceptance of such a spot ETF via social media sent prices soaring before the announcement was revised. This situation has been very enlightening.

Another rather quiet week on cryptocurrency markets, so it’s the industry news that’s grabbing attention. Unsurprisingly, much has been written about Sam Bankman-Fried’s trial in recent days as it’s in full swing.

It was a positive week for Bitcoin, with the asset briefly reaching its highest level in two months on Sunday. The bullish movement enabled the liquidation of positions worth $47.4 million in the futures market, 90% of which were short orders. This movement is particularly encouraging when placed in the current context. Indeed, stock markets are suffering, as is gold, while the U.S. Dollar Strength Index continues to rise. All these factors were once bearish for BTC, indicating once again that past correlations are diminishing. The asset is truly beginning to go it alone.

It was a notably quiet week in the cryptocurrency industry. Following the consistently hawkish remarks from Fed Chairman Jerome Powell last Wednesday, all risk assets, including U.S. stock markets, saw declines in the days that followed. Nevertheless, bitcoin has risen by over 2% this morning (as of this writing), despite the continued rise of the U.S. Dollar Index (DXY), which hit a new 10-month high of 106.48.

As Bitcoin regained the $27,000 mark for the first time in over two weeks, the token’s dominance index has crossed 50%. All eyes are now on the US Federal Reserve’s interest rate decision this afternoon, although there is almost consensus on the decision to be made. Once again, it is Jerome Powell’s words on future directions that risk moving the markets.

After a week that had a bearish appearance over the weekend and on Monday, the price of bitcoin rebounded in the $25,000 zone, basically trading today at the same level as during our most recent communication. This same area had served as support before a strong rebound last June. In the short term, there is certainly hope that this zone does not change from support to resistance.

For professional reasons, this communication is being sent to you on Thursday rather than the traditional Wednesday. However, it cannot be said that there have been major changes in the markets in the last 24 hours. On the contrary, volatility remains historically low with the market appearing to be in wait-and-see mode, operating within a tightly held transaction channel over the past week.